After all, the recession in America
Value creation is already shrinking in almost all US states. The important gate is not far away.
Source: Game of Trades, Billy Fed
The United States is nowhere near as homogenous as it appears in the discourse about economic performance of the largest economy. As with the Eurozone currency area, the US has states that perform better or worse.
In the fourth quarter of 2023, 22 countries, nearly half, were in a contraction phase – declining economic performance. In contrast, US GDP increased significantly overall, with an annualized quarterly growth rate of more than 3%.
This overall performance is only possible because some key countries are showing impressive growth. Just four states contribute one-third of the total value added in the U.S. — 8.8 trillion. $ Made in California, Texas, Florida and New York. Of the Big Four, only New York is in decline; Others are growing strong against all odds.
As the bloggers at Game of Trades point out, 26 is the historic limit at which the entire US economy has slipped into recession. So if at least 26 states shrink, a decline in total value addition is inevitable. The soft landing or no landing that will be played in the markets is yet to be finalised.
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