Attention Economy


Friday, February 21, 2014

US versus International Economic Developments

Former Chairman of the Goldman Sachs Global Asset Management division, Jim O'Neill, is puzzled by the continuing international obsession (amongst media outlets/analysts/economists) with US economic data despite dramatic changes in the global economic landscape:

“…back then the indicator [US non-farm payrolls] measured something that really mattered in global economic terms: the state of the U.S. labor market. These days, I wonder why anyone outside the U.S. pays that much attention.

... For the internationally focused, it's more of a puzzle. The world has changed. In the late 1990s, the U.S. accounted for almost 20 percent of world imports: Through that channel, changes in the U.S. directly affected the rest of the world -- and the U.S. labor-market data was crucial information. In 2013, U.S. goods imports were in the vicinity of $2.3 trillion. That's about 14 percent of U.S. gross domestic product and just more than 12 percent of world imports -- less than in the late 1990s.
China's imports now stand at a little less than $2 trillion, some 20 percent of GDP and roughly 10 percent of world imports. Since the recession, China's yearly imports have surged by more than $800 billion. Unless something remarkable happens, China will soon be world’s biggest importer -- as well as the world's biggest exporter, which it is already.”