U.S. Economy Ends The Year On An Upswing, According To Decision Analyst’s Economic Index
Arlington, Texas—The Decision Analyst U.S. Economic Index stood at 116 in December 2017, the same score as November 2017. The Index increased 2 points from December a year ago (December 2016), but was flat from November 2017 to December 2017. The past-12-month slope of the Economic Index indicates that the U.S. economy will continue to expand throughout the first half of 2018, and perhaps beyond. The Economic Index tends to lead U.S. economic activity by 6 to 12 months. Below is the past-10-year history of the U.S. Economic Index.
“The U.S. Economic Index is up 2 points over the past 12 months, an indication of moderate economic expansion and an indicator of continued GDP growth,” said Jerry W. Thomas, President/CEO of Decision Analyst. “The greatest risks to the U.S. economy in coming months, apart from political uncertainties in Washington, D.C., are ultra-low interest rates and the cumulative effects of quantitative easing. The vast floods of cheap money that the Federal Reserve has poured into the U.S. economy over the past 6 to 8 years have created a number of asset bubbles. Asset bubbles are difficult to see, and difficult to believe, when prices are rising and everyone is having fun. Unfortunately, asset bubbles don’t last forever, and when they pop, the drag on the overall economy could trigger a recession. A major stock market correction is probable during 2018. While the U.S. Economic Index points to continued GDP growth, the risks of a downturn are rising,” said Thomas.
All but one of the Economic Indices for the U.S. Census Divisions have increased in the past 12 months. The New England Census Division had the lowest score in December 2017 with a 109, which was a decrease of 3 points in the past 12 months. Meanwhile, the East North Central Census Division and the South Atlantic tied for the highest score in December 2017, each with an Index of 119. The West South Central Division followed closely behind with a score of 118.
The following chart compares Decision Analyst’s U.S. Economic Index to its Economic Indices for other countries. The Russian Federation increased by 6 points in the past 12 months, while the United Kingdom and France each declined by 2 points. In South America, Brazil increased 10 points in the past 12 months, and Chile increased 9 points. Colombia declined by 3 points. In Asia, India declined by 4 points.
The Decision Analyst Economic Index is based on a monthly online survey of several thousand households balanced by gender, age, and geography. The scientific survey is conducted in the last 10 days of each month. The Economic Index is calculated from 9 different economic measurements using a sophisticated econometric model. The result is a snapshot of coming economic activity in each country surveyed, as seen through the eyes of representative consumers living in the respective countries.
Decision Analyst conducts its concurrent economic surveys each month in Argentina, Australia, Brazil, Canada, Chile, Colombia, France, Germany, India, Italy, Mexico, Peru, the Russian Federation, Spain, the United Kingdom, and the United States. Whenever the Decision Analyst Economic Index is greater than 110, it tends to signal an expanding economy. An Index value of 90 to 110 suggests a no-growth or slow-growth economy, and near or below 90 generally indicates economic contraction. These guidelines vary by country, however.
About Decision Analyst
Decision Analyst (www.decisionanalyst.com) is a global marketing research and analytical consulting firm specializing in strategy research, new product development, advertising testing, and advanced modeling for marketing decision optimization. For over 35 years, the firm has delivered competitive advantage to clients throughout the world in consumer-packaged goods, telecommunications, retail, technology, medical, and automotive industries.
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