Un-synchronized Global Growth?

Over the last couple years, one of the most popular phrases in the financial world was “synchronized global growth.” The idea was that all the major economies in the world (America, Europe, Japan and China) were finally growing together, which was very helpful for the American economy and stock market.  

However, as much as a strong global economy can help us, it can also pull us down. The last big drop in the stock market was in early 2016, and China was a big reason for that drop. Similarly, in 2011 and 2012, a crisis in Europe caused major drops in the stock market (remember Greece?). Unfortunately, similar worries are starting to creep into the financial world. Both Europe and Japan are looking weaker, and China recently had a string of surprisingly bad economic reports.  No one is predicting a recession in any of those places any time soon. However, it’s not good news if the global economy is slowing.  

On the other hand, it doesn’t seem to be hurting the American economy so far. Recent jobs reports have been stellar, consumer confidence and business confidence are high, and Americans are still buying lots of expensive, unnecessary things. 

The only semi-bad recent economic news was our 1st quarter GDP of only 2.2%. However, even that isn’t terrible news. Our 1st quarter GDP has been notoriously weak for years, and economists can’t quite figure it out. They usually blame it on stormy winter weather keeping people at home. 

Most economists think our GDP will bounce back in the 2nd quarter to 3%-4%, or even higher – which would quickly make everyone forget about our lackluster 1st quarter. So, we are still doing well here in America. Let’s hope the rest of the world can keep it together. 

Brad Blackburn, CFP®, is the owner of Blackburn Financial, Registered Investment Advisor. Blackburn Financial is located at 121 Cottage Ave, Cashmere. He can be reached at 509-782-2600 or email him at brad@blackburnfinancial.net

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