In recent years, the economic situation in the world has been turbulent, and many economists and institutions have said that the US economy will fall into recession. However, according to the National Economic Statistics Report for the first three quarters of 2023, the U.S. economy grew by 25%, and there are no signs of recession. Compared to other developed countries and large developing economies, the U.S. economy is not only growing at the fastest pace, but also growing in size. So why was the U.S. economy able to break the recession narrative?This article will analyze from multiple aspects.
1. The balance of residents' assets is abundant
First of all, U.S. residents have abundant assets. As of June of this year, the balance of deposits of U.S. resident households and nonprofit organizations was as high as 17786 trillion US dollars, with per capita deposits reaching 5$110,000. This means that U.S. residents can enter the consumer market at any time and become an important force driving economic growth. These assets can not only support the stable development of the U.S. economy, but also drive the development of other related industries and promote the overall economy.
2. Excess savings help consumption
Second, U.S. households have accumulated a large amount of excess savings during the pandemic, and this situation is expected to continue into the first half of 2024. According to the San Francisco Fed, as of the end of September this year, the excess savings of American households were about $430 billion. These additional savings will continue to support private consumption demand in the United States in the coming quarters, making it difficult for consumption, a supporting factor, to show signs of recession anytime soon.
3. Investment leads economic growth
In addition, U.S. investment is also an important engine of economic growth. Investment in housing, equipment, intellectual property, inventory, etc., all contribute significantly to the GDP of the United States. From Obama to Trump, and now Biden, the United States has been actively promoting the return of manufacturing to the United States, strengthening chain security, and incorporating a number of emerging industries into the national development strategy. The investment expansion effect brought about by these measures has not only promoted the growth of the US economy, but also brought more jobs and income to the American people, further stimulating consumer demand.
4. Policy adjustments to boost the economy
Finally, the U.S. Department of Commerce revised the "Base Year Prices in the U.S. Economic Accounting Process" to raise the GDP base of previous years, resulting in an improvement in the size of the U.S. economy. In addition, the impact of inflation has also brought new development opportunities to the U.S. economy. ** High consumption and investment spending, as well as the real development of the economy, make the economic development momentum of the United States continue to increase, and it is difficult to have a recession.
Through the analysis of the U.S. economy, it can be seen that the reason why the U.S. economy was able to break the recession was mainly due to the combined effect of factors such as the abundant balance of residents' assets, excess savings to boost consumption, investment-led economic growth, and policy adjustments to boost the economy. Compared to other countries, the United States has a high level of spending power and assets, which provides a solid foundation for economic growth. At the same time, the positive measures have also injected new impetus into economic development. As the U.S. economy continues to grow, so does the global importance and influence on the U.S. economy.
In short, the U.S. economy not only did not experience a recession in 2023, but achieved results that exceeded market expectations. This is mainly due to the high assets and spending power of American residents, as well as the active policy and investment guidance of **. As one of the largest economies in the world, the non-recession of the US economy is not only of great significance to the American people, but also plays an important role in promoting the stability and development of the global economy. We have reason to believe that in the future development, the US economy will continue to maintain a strong and stable growth momentum and make greater contributions to the recovery and prosperity of the world economy.