Unemployment is still too high, income is still too low, and the recovery is still too slow – but the United States is faring considerably better than other developed nations against the threat of a renewed recession and remains “the brightest spot in the world economy,” according to the latest indicators tracked by the Financial Times and the Brookings Institution. Known as TIGER, or Tracking Indices for the Global Economic Recovery, the comprehensive data report compiled by the London-based business daily and the centrist Washington think tank provides a factual context for the U.S. presidential debate.
Favorable comparison with other nations, in a faltering world economy, may reinforce President Obama’s argument that his policies are working despite jobs statistics that remain deeply troubling. Moreover, criticism of Obama by Republican Mitt Romney may well be regarded as less credible if the U.S. economy is in fact performing better than every other developed country — especially those pursuing the austerity policies advocated by Romney and his running mate, Rep. Paul Ryan.
Combining measurements of real economic activity, financial data, and surveys of business and consumer confidence, the TIGER index employs advanced statistical methodology to illustrate the simultaneous movements of indicators that tend to be measured very differently in various countries. According to the Financial Times, which featured the latest report on its Monday front page under the headline “US defies threat of global recession”:
The TIGER index shows momentum in the global economy dissipating despite action by the Federal Reserve, European Central Bank, Bank of Japan and Bank of England to boost the recovery. Only in the US – on the brink of the presidential election – has economic momentum remained reasonably robust.
“The global economic recovery is on the ropes, battered by political conflicts within and across countries, lack of decisive policy actions, and governments’ inability to tackle deep-seated problems such as unsustainable public finances that are stifling growth,” said Eswar Prasad, a Brookings senior fellow and creator of the TIGER index. “The US economy remains the sole bright spot, with economic activity, employment and financial markets all showing unexpected although still modest strength.”
Worldwide demand remains too feeble to promote a strong and steady global recovery, despite continuing efforts by the central banks in the U.S., Europe, and Asia — and the TIGER data compiled from the Group of 20 nations shows worrisome deterioration. It was released on the eve of the annual meetings of the World Bank and the International Monetary Fund in Tokyo, where finance ministers and central bankers will discuss how to stimulate growth and forestall another recession. The Financial Times also quoted leaked IMF data indicating that global growth projections for this year will be revised downward, from 3.4 percent to 3.3 percent, and for next year from 3.9 percent to 3.6 percent.
Photo credit: AP/David Becker, File