The U.S. and global economies are slowing, but there has been little negative affect, according to an analysis by The Conference Board, a non-partisan business research organization in New York City.
?While it is easy to attribute the slowdown either to Federal Reserve Board rate hikes or to high oil prices, it is likely that both have had a rather modest effect up to this point,? says Gail D. Fosler, evp and chief economist of the group, in a press statement. She cites the liquidity of American funds, the growth in personal income and a strong housing market as factors that have helped keep the slowdown below the media?s radar. The analysis revealed that domestic consumer demand is growing at a solid 3.5 percent annually, but imports are growing at a far greater pace due to growth in nearly every product category.
The board warned about the United States? ?inability to sustain? its current trade deficits. ?Even the U.S. cannot absorb both its own productive capacity and the rapidly growing excess productive capacity of the rest of the world,? the board said.
On the other hand, a Grant Thornton survey of CEOs says:
…The large majority of executives (68 percent) expect the economy will improve in the next six months. This optimism, however, is more tempered than six months ago when 73 percent predicted economic improvement, and down significantly from a three-year high of 83 percent one year ago. It is interesting to note that there was a jump in optimism after the U.S. presidential election. Sixty-three percent of business leaders surveyed before Nov. 2, 2004, believed the economy would improve, compared with 73 percent of those surveyed after the election.
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