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Front of mind | Article - 1 Min

Chart of the Week - What's keeping the US economy afloat?

The challenges faced by the European and US economies have been broadly similar: pandemic-related disruptions, higher inflation, and large increases in central bank policy rates. But the performance of their economies has been quite different, as can be seen by the latest retail sales figures.  

In July, sales rose by 0.7% over June in the US, while in much of Europe, sales actually declined.  One key reason is the fiscal support provided to households, which was not only much larger in the US, but also more targetted towards lower income households. This is significant as this part of the populations tends to spend more of their income, while richer households tend to save it.


Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience. Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns. Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions). Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.

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