Global investors looking for signs of recovery need to pay close attention to U.S. consumers, Thunderbird School of Global Management Professor F. John Mathis, Ph.D., said April 7, 2011, during an interactive alumni webinar.
“The U.S. will drive the world’s recovery at this stage,” Mathis said. “I don’t think China or India will be able to sustain such high growth rates unless the U.S. recovers.”
Mathis said real consumer income has bounced back in the United States, although employment gains have been slow. He said negative events such as the Middle East uprisings, the Japanese tsunami and the budget deficit debates in Washington, D.C., have created uncertainty and slowed a consumer confidence recovery that started in 2010. “The more concerned consumers become about the environment,” he said, “the more reluctant they will be to spend and boost retail sales.”
Although spending has climbed in the United States, Mathis said consumers remain reluctant to purchase durable goods such as appliances. He said the housing market also remains weak. “There is a significant difference in what consumers are spending their money on,” he said.
Watch the full webinar on Thunderbird’s YouTube channel.
|Global Economic Outlook: Thunderbird School of Global Management Professor F. John Mathis, Ph.D., talks April 7, 2011, about the U.S. role in the global economic recovery. View the video on YouTube (1:03:40).|