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.