In the United States, a paradoxical economic recovery

It’s Jean-qui-pleure and Jean-qui-laugh. The United States returned to growth in the third quarter, with gross domestic product (GDP) growing by 2.6% on an annual basis, according to figures published Thursday, October 27. At the same time, the technology giants, the famous GAFAM (Google, Apple, Facebook, Amazon and Microsoft), are collapsing on Wall Street and have destroyed, since Wednesday evening, nearly 1,000 billion dollars (as many euros) of value. Explanation of this paradox: the growth figure concerns the past, while the reaction of the Stock Exchange is due to the gloomy forecasts of the tech giants, which suggest a slowdown, even a recession.

In terms of past growth, the country benefited from an excellent third quarter, after experiencing two consecutive declines in the first and second quarters (by 1.6% then 0.6%). Less than two weeks before the midterm elections, which promise to be very difficult for the Democrats, President Joe Biden immediately issued a statement of satisfaction. “For months, pessimists have been arguing that the US economy is in recession, and congressional Republicans have been pushing for a slowdown. But today we have further evidence that our economic recovery continues to move forward,” rejoiced the Democratic president, while unemployment is at its lowest (3.5%) and inflation is still very high (8.2%).

The figure, better than expected, satisfies everyone because it is misleading. It allows the White House to jubilate and assure that there was no recession in the first half of the year – usually, we consider that there is a recession when the GDP declines for two consecutive quarters, which is passed, but the White House and the Federal Reserve (Fed) believed that it was not the case because of the excellent performance of employment. In reality, growth is largely explained by the good performance of the external balance, with a sharp increase in hydrocarbon exports.

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Landing of the real estate market

But consumption, the main driver of the economy, only increased by 1.4 points (slight decline of 1.2 points for goods and increase of 2.8 points in services), while investment down 8.5%. And that’s excellent, since this figure shows that the economy is starting to cool. This step is essential if the Fed wants to defeat inflation. “Ignore the headline figure – the growth rate is slowing downsaid Michael Gapen, chief US economist for Bank of America. It wouldn’t take much more of a slowdown to tip the economy into a recession. »

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