The world’s biggest economy will expand by 3.2 percent or more this year, its best performance since at least 2005, as an improving job market leads to stepped-up consumer spending, according to economists at JPMorgan Chase & Co., Deutsche Bank AG and BNP Paribas SA. That outcome would be about what each foresees for the world economy as a whole and would be the first time since 1999 that America hasn’t lagged behind global growth, based on data from the International Monetary Fund.
In the latest sign of America’s resurgence, the Labor Department reported on Jan. 9 that payrolls rose 252,000 in December as the unemployment rate dropped to 5.6 percent, its lowest level since June 2008. Job growth last month was highlighted by the biggest gain in construction employment in almost a year. Factories, health-care providers and business services also kept adding to their payrolls.
About 3 million more Americans found work in 2014, the most in 15 years and a sign companies are optimistic U.S. demand will persist even as overseas markets struggle.
The U.S. is breaking away from the rest of the world partly because it has had more success working off the debt-driven excesses that helped precipitate the worst recession since the Great Depression.
Delinquencies on consumer installment loans fell to a record-low 1.51 percent in the third quarter, the American Bankers Association said on Jan. 8. That’s “well under” the 15-year average of 2.3 percent on such loans, which include credit cards and borrowing for car purchases and home improvements, it said.
Spending is already strengthening. Households splurged on new cars, appliances, televisions and clothing as spending climbed 0.6 percent in November, double the gain in October, according to figures from the Commerce Department in Washington. Light-vehicle sales totaled 16.5 million in 2014, the most since 2006.
Deutsche Bank economists led by David Folkerts-Landau in London forecast U.S. GDP will expand 3.7 percent this year, after climbing 2.5 percent in 2014. The U.S. will contribute close to 18 percent to global growth of 3.6 percent in 2015, compared with 7 percent for all other industrial countries combined, they wrote in a Jan. 9 report.
While the U.S. is gathering strength, the BRIC nations -- Brazil, Russia, India and China -- are facing tougher times after spending much of the past 15 years basking in the attention of global investors.
Brazil’s debt was downgraded last year for the first time in a decade while Russia is heading into recession, its economy pummeled by the collapse of oil prices and U.S. and European sanctions. Growth in China and India has slowed as both countries grapple with revamping their economies.
The U.S. has pulled ahead of other industrial nations partly because its policy-making has been better, according to Paul Mortimer-Lee, chief economist for North America at BNP Paribas in New York.
European Central Bank President Mario Draghi and his colleagues are still weighing whether they should buy government bonds to fight off the danger of deflation -- a step that the Federal Reserve first took back in 2009.
U.S. budget policy also has been more effective than the euro region’s austerity strategy, which undercut the continent’s economy, Mortimer-Lee added.
Japan, meanwhile, managed to throw its economy back into a recession by raising its consumption tax to 8 percent from 5 percent on April 1.