US boom continues to set new records – but warning signals are also flashing brighter

A column from New York by Herbert Bauernebel

The boom in the USA continues to deliver record figures – but is the US economy slowly overheating?

The figures are impressive about a US economy steaming out of all cylinders. So far, the only bright spot in Donald Trump’s tenure seems to be the only one, even though he is hardly credited with this – his popularity figures lie frozen in the basement (39.9 % approval on average).

Every day, the boom economy is setting new records:

– The “Small Business Optimism Index”, which reflects the mood among small businesses, had a record high in 2017.

– Last year’s optimism also peaked in the US labour market, Gallup said.

– Top banker Jamie Dimon expects the world’s largest economy to grow by four percent this year – even if he contradicts the forecasts of his own analysts.

– On Wall Street, the bang of the champagne corks continues in the new year, the “Dow” climbed to a record high of more than 25,400 points on Tuesday.

The NYSE

 

But despite the festive mood on a broad front, voices are increasing, warning against overheating.

 

High debts of the Americans as a warning signal

These concerns can also be substantiated with data and historical experience:

Paradoxically, the growing euphoria on the stock markets in particular could be an omen for future stock market quakes: Analysts are registering the fastest growth in corporate profits in ten years – but in the past, such turbo thrusts preceded price declines, Bloomberg reported.

The good mood of the US consumers also leads to the fact that many of them apparently overreach themselves financially: The credit-card-financed debt of the Americans had risen to $1.023 trillion in November, the Fed announced on Monday. The increasing indebtedness of US citizens is considered by many market observers to be alarming and unsustainable, according to USA Today.

But nobody seems to be spoiling their mood at the moment: after all, there had been prophecies of doom and warnings throughout the past year – but it continued to rise. Market observers only agree on one thing: no party can last forever.

For Trump, a setback on this front could be politically fatal – the hangover after a possible end of the small US economic miracle could sweep him out of office.

Herbert Bauernebel has been a freelance US correspondent in New York since 1999 and heads the information portal AmerikaReport. de with blogs, analyses and news – from “Breaking News” to political exciters, from trends from the “Silicon Valley” to Wall Street.

 

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