A new financial analysis from the Brookings Institution finds that the global economy could stall and that the U.S. recovery is starting to teeter under the weight of carrying the world.
“The main theme for 2015 seems to be that things could be worse rather than that better days are ahead,” said the new analysis based on the “Brookings-Financial Times Tracking Indexes for the Global Economic Recovery.”
Analyst Eswar Prasad, a Brookings senior fellow, blogged that the information “reveals a somber picture characterized by stagnant low growth, risks of deflation, and weak consumer and business confidence.”
From Brookings.edu
Three economies — the U.S., U.K. and India — appear steady, but others aren’t. And, he added, “Geopolitical uncertainties, ranging from the volatile negotiations between Greece and its Euro zone counterparts to the tensions in Ukraine and the Middle East, continue to sap confidence.”
China, he added, is also facing a slowdown.
The U.S. is strong, but he has doubts of continued hopefulness. “U.S. economic growth remains resilient, but slowing employment growth suggests that the persistent strength of the U.S. dollar and the burden of carrying the world economy on its shoulders might be weighing on the U.S. economy. Consumer confidence remains strong, boosting growth in retail sales, and credit growth has picked up. However, with wage and price pressures still well contained, the likelihood that the Federal Reserve will start raising interest rates early in the summer has receded,” he wrote.
Paul Bedard, the Washington Examiner’s “Washington Secrets” columnist, can be contacted at [email protected].
