For a nice overview of the American and global economies, I read Caterpillar’s quarterly earnings reports. They are a wealth of analysis and information!
Here’s a snippet from the latest, released today.
Sovereign debt problems, political change in the Middle East, the earthquake and tsunami in Japan and higher oil prices contributed to slower than expected economic growth in the first half of 2011. Those factors heighten concern about the future pace of economic recovery. Although the recovery is slower than expected, particularly in developed economies, we anticipate further growth in the second half of 2011. We expect the world economy will grow 3.5 percent in 2011, down from 3.9 percent in 2010.
My summary of CAT’s thorough analysis is thus:
- Developing countries are growing while the Western world remains stagnant.
- China is still growing but is not accelerating, so it is second derivative regression.
- Any growth we do have in North America is not tied to jobs, but to technology improvements and worker productivity.
- If we enter a time of austerity, we are probably facing another recession.
- And finally: Highlight Japan’s economic importance. The disasters there this year slowed global economic growth.
I have been writing about business and finance for the past eight years, and I’ve found that the ability to synthesize a lot of information and make it readable, comprehensible and interesting is a rare skill. Hats off to the writers at Caterpillar.
CAT is such a fascinating & an exceptionally well run company – straddling the developed & developing world (& is vital to IL’s econ). When reading the WSJ “Real Time” story on its earnings http://on.wsj.com/nteCjU, I was so glad to see its CEO warn against “premature fiscal and monetary policy tightening, particularly in the U.S and Europe.” I think it’s so important for corporate execs to make clear that such measures would be counterproductive in the short-run, & by slowing growth, will have only minimal long-term impact on debt relative to GDP.
As to the first point in your summary (although not directly relevant to CAT), I thought http://nyti.ms/jNNjUq (“It is hard to overemphasize the importance of this business shift from the U.S. middle class to the rich at home and the hundreds of millions graduating into the middle class in the emerging markets..”) was such a helpful piece in thinking about key changes in the US & global economy.
& as to your last point, one writer in particular who has that skill is David Leonhardt, the new DC bureau chief for the NYT http://bit.ly/ndAJhm
That NYT article on the middle class is fascinating, and sadly, I think it’s true.
Thanks for sharing their report. Interesting. I would like to be that optimistic as they are in the grow of gdp. Everything looks like we are going to another recession:( maybe stagflation…
Sad to know debts are hiking higher than expected. But I still have trust that the economy would be stable and gain more good points. As Obama said, we are still a triple A.
Higher oil prices has impacted a lot to our economy badly. What can be the solution, if not for growth, but atleast to maintain the current economy?