America is the engine of the global economy. When does this become a problem?
In the calculation of the world economy, a foreign tourist staying in the United States essentially purchases an export of American services. Travel exports were only $ 18 billion in the first four months of 2021, compared to $ 67 billion in the same period of 2019.
Meanwhile, American hunting consumers have shifted their spending from services to goods. In the first four months of the year, imports of consumer goods rose 29% from 2020, a jump of $ 57 billion.
“The only thing people could consume was goods,” said Constance Hunter, chief economist at KPMG. “You couldn’t have a wedding, you couldn’t go to a baseball game. So what did people buy? They bought goods, and it is much more of a global market than services.
Indeed, the United States and China are acting as the engines of the global economy, while most of the rest of the world is further behind in recovering from the pandemic.
In the IMF’s World Economic Outlook released in April, the U.S. GDP in 2021 is expected to be 3% above its 2019 level, while that of China is expected to be 11% above its 2019 level. 2019. But the Eurozone and Japan were each on track to have economies 2% lower than in 2019, with Britain, Canada, Brazil and Mexico also forecast in negative territory.
This is unfortunate for the people of these regions which are experiencing a slow recovery, but it is likely helping to prevent supply shortages in many sectors from worsening. Already, a semiconductor shortage has hampered auto production; shortages of building materials have suppressed housing construction; and a shortage of shipping containers has skyrocketed the cost of transporting goods across oceans.
“If everyone were stimulating simultaneously and everyone enjoying maximum growth simultaneously, you might see more congestion,” said Nathan Sheets, chief economist at PGIM Fixed Income and former senior international economist at the Reserve Federal and US Treasury.