{"id":9716,"date":"2021-07-12T18:38:29","date_gmt":"2021-07-12T18:38:29","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9716"},"modified":"2022-02-26T13:05:52","modified_gmt":"2022-02-26T13:05:52","slug":"u-s-consumer-fuels-global-demand-and-creates-global-risks","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/u-s-consumer-fuels-global-demand-and-creates-global-risks\/","title":{"rendered":"U.S. Consumer Fuels Global Demand and Creates Global Risks"},"content":{"rendered":"\n<p>Following the 2008 \u2013 2009 Global Financial Crisis, U.S.\nconsumers were in bad shape. Housing prices were depressed, many workers were\nout of a job, and household wealth declined sharply. For many years after the\ncrisis, Americans paid down debts and worked to get their financial houses in\norder.<sup>1<\/sup><\/p>\n\n\n\n<p>Fast forward to the 2020 pandemic-induced recession, and the\nsetup for U.S. consumers couldn\u2019t look more different. This time around, debt\nlevels have fallen, the personal savings rate soared, housing prices are\nshattering records, and wages are on the rise. About $6 trillion in stimulus\nmoney is swishing around, and more appears to be on the way.<\/p>\n\n\n\n<p>After the Financial Crisis, China led the recovery with\nmassive fiscal spending. After the pandemic-induced economic crisis, it\u2019s the\nU.S. consumer leading the way. <\/p>\n\n\n\n<p>____________________________________________________________________________<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_07_12&amp;content=stock_market_outlook_report   \">Not Sure What\u2019s Next for the Market? Download Our Stock Market Outlook Report!<\/a><\/strong><\/p>\n\n\n\n<p>The pandemic-induced economic crisis is now showing signs of\nrecovery, but investors should always be prepared for what\u2019s to come. One way\nto prepare is taking the <em>what-if\u2019s<\/em> into account. What if there are\npossible risks down your financial timeline? <\/p>\n\n\n\n<p>That\u2019s why investors should stick to the facts and hard\ndata. Don\u2019t try to time the market and give in to fear and emotions! Instead, we recommend keeping\nyour focus on the long-term by looking into key economic indicators that can\nmake a positive impact on your financial success.<\/p>\n\n\n\n<p>To help\nyou do this, I am offering all readers our just-released Stock Market Outlook\nreport. This report contains some of our key forecasts to consider such as: <\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Zacks\nrank S&amp;P 500 sector picks<\/em><\/li><li><em>Zacks\nview on equity markets<\/em><\/li><li><em>What\nproduces 2021 optimism?<\/em><\/li><li><em>Zacks\nforecasts for the remainder of the year<\/em><\/li><li><em>Top\nstocks in top industries<\/em><\/li><li><em>Sell-side\nand buy-side consensus<\/em><\/li><li><em>And\nmuch more<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!&nbsp;<br><\/p>\n\n\n\n<p><strong>IT\u2019S FREE.&nbsp;<a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_07_12&amp;content=stock_market_outlook_report   \">Download the Just-Released July 2021 Stock Market Outlook<\/a><sup>2<\/sup><\/strong><\/p>\n\n\n\n<p>____________________________________________________________________________<\/p>\n\n\n\n<p><strong>U.S. Consumer\nSpending Has Jolted Higher, Pulling the Global Economy Higher<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/6_pic1-2-1024x395.png\" alt=\"\" class=\"wp-image-9717\"\/><figcaption> <strong><em>Source: Federal Reserve Bank of St. Louis<sup>3<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n<p>The strength of the American consumer is critical for the\nglobal economy, and it also bears quite a bit of weight in the analysis we\nconduct at Zacks Investment Management. If earnings are central to our\ninvestment approach and the theses we develop, then it follows that tracking\nthe U.S. consumer is crucial. Americans drive spending, and spending drives\nearnings. <\/p>\n\n\n\n<p>Indeed, Americans account for over one-quarter of all\nspending worldwide, with China far behind at 11%. For 2021, U.S. consumer\nspending is expected to rise 10% (year-over-year) after adjusting for\ninflation, which would mark the strongest performance since 1946. <\/p>\n\n\n\n<p>Demand for U.S.-made goods and services is strong, but\nAmericans also buy significant amounts of foreign-made goods. By some estimates,\nthe U.S. will spend an additional $170 billion in imports each year for the\nnext 5 years, and will also post a record trade deficit of $876 billion this\ncalendar year alone. <\/p>\n\n\n\n<p>For many countries, a strong U.S. consumer is an economic\nblessing, and U.S. fiscal spending is icing on the cake. Government spending in\nthe U.S. is expected to lift GDP in Japan, China, and the eurozone by at least\n0.5% in the next year, and perhaps even up to 1% in Canada and Mexico. <\/p>\n\n\n\n<p>All of the additional spending is welcomed, but it also poses some challenges for businesses and non-U.S. economies. Many businesses currently do not have the personnel or production capacity to meet current demand, and supply chains are still facing bottlenecks. Surging demand for consumer goods is thus putting price pressure on a broad array of products and inputs, which raises the costs of goods globally. This price pressure poses a risk for the recoveries of other countries.<\/p>\n\n\n\n<p>One example is the rising demand for personal computers. Over\nthe past year, sales of personal computers (PCs) have risen by 50% or more <em>each quarter, <\/em>as workers set up home\noffices and as families acquired computers for remote learning. This demand has\nput immense pressure on supply chains for semiconductors, making them scarce in\nthe global economy. Analysts predict even more PCs will be sold as the hybrid\nwork model takes hold, and as home education becomes more commonplace. <\/p>\n\n\n\n<p>In this sense, the U.S. consumer is largely responsible for\nprice pressure on a consumer good \u2013 personal computers \u2013 <em>and <\/em>on the availability of semiconductors. The U.S. consumer is a\nforce for good, but such strong demand also creates logistical challenges and\ndislocations across the global economy.&nbsp; <\/p>\n\n\n\n<p><strong>Bottom Line for\nInvestors <\/strong><\/p>\n\n\n\n<p>The U.S. consumer is the most powerful\nforce in the global economy, and all signs point to a strong year for spending.\n<\/p>\n\n\n\n<p>But strong demand comes with risks and\nchallenges: rising prices for consumer goods in countries where the economic\nrecovery is still in early stages; businesses scrambling to increase production\nand hire enough workers to meet demand; wage pressures; and, scarcity of inputs\nin supply chains. These all represent good problems, of course, and in the\nmonths ahead there will be many opportunities for businesses to capitalize.\nFrom an investor\u2019s perspective, finding those businesses is the key. <\/p>\n\n\n\n<p>In\naddition to keeping an eye on these businesses, we also recommend that\ninvestors keep a diversified approach when investing. In such early stages of\nrecovery, it\u2019s good to stay focused on the facts and key data points that can positively\nimpact your long-term investments. <\/p>\n\n\n\n<p>To help\nyou do this, I am offering all readers our just-released Stock Market Outlook\nreport. This report contains some of our key forecasts to consider such as: <\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Zacks\nrank S&amp;P 500 sector picks<\/em><\/li><li><em>Zacks\nview on equity markets<\/em><\/li><li><em>What\nproduces 2021 optimism?<\/em><\/li><li><em>Zacks\nforecasts for the remainder of the year<\/em><\/li><li><em>Top\nstocks in top industries<\/em><\/li><li><em>Sell-side\nand buy-side consensus<\/em><\/li><li><em>And\nmuch more<\/em><\/li><\/ul>\n\n\n\n<p>\n\nIf you have $500,000 or more to invest and want\nto learn more about these forecasts, click on the link below to get your free\nreport today!&nbsp;\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"<p>American consumers lead the way in this recovery, but create challenges throughout the global economy<\/p>\n","protected":false},"author":3,"featured_media":8874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[63,71],"tags":[],"class_list":["post-9716","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitch-on-the-markets","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9716"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9716\/revisions"}],"predecessor-version":[{"id":10356,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9716\/revisions\/10356"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}