Where is US Economy heading ?

My opinion on the US macroeconomic outlook is based on the information from websites http://www.forecasts.org and http://www.gpoaccess.gov/indicators/07sepbro.html. The former website gives useful insight by forecasting the leading economic indicators whereas the latter tracks the trends and thus helps to get an historical view and current picture. Based on my analysis, the US economy is poised for a slow down due to various reasons like recent sub-prime mortgage issue, increasing trade deficit, fed’s recent move to lower discount rate to 4.75% and possible quarter point decrease pressuring the strength of the dollar, increasing oil price. The housing sector is poised for a high slowdown with thousand units annual rate reducing from 1281 to 1074. The growing cost of health sector also decreases the discretionary income.

While unemployment rate has risen in the recent months to 4.7% based on the actual indicator from gpoaccess.gov, the forecasts.org suggests this to be rising in the future to 4.73%. The forecast for CPI is also high leading to 209.5 in March 2008 suggesting inflation. The PPI also leads to a constant lower 170’s with no significant decrease. Based on these, ie the increasing energy price and the decreased economic activity could be a double edged sword leading to stagflation. The slowdown in US economy along with an increased global inflation index will discourage US consumer spending and hence the imports. The $9 trillion US debt only sheds the investors away from dollar backed sectors.

While economic indicators can go so far as stated above, history shows that inventions and innovations have always come to the rescue. With US leading the green effort and being a house for R&D till date, a viable alternative to oil that address the scale can turn things around. Interestingly, this is clearly one of the pressing issues that humankind needs an answer. Even more to save the US Dollar.

Fortune Global Forum - 2007 at New Delhi, India

At a time when globalization is the heart of talk at household level, the following link has few interesting video links that gives different perspectives from top echelons in today's corporate world, especially from US and India. Personally, the confident remarks made by Indian Business magnets and their recognition that India has a long way to go to join the Developed nation list, has never been better before. In my next post, I plan to write my forecast on how the US economy could head towards and its implications on other emerging countries or should I say growing countries would be ?

Ofcourse, the economical analysis can only go so far by making few political assumptions, in the absence of which writing this blog would have had a big opportunity cost of making that additional buck :)

Fortune Global forum 2007 videos at
http://money.cnn.com/video/globalforum/#/video/fortune/globalforum/

Invention Of the Year: The iPhone- Should it be Innovation ?

Time Magazine had recognized The IPhone as the Invention of the Year. Based on my understanding on the definition of Invention and Innovation, I am not convinced that this can be branded as an invention. Calling it innovation would fit this product and its features. With tons and tons of articles out there on the web to differentiate innovation and invention, it is quite straight forward to go through the 'Time' link below and ponder oneself.

http://www.time.com/time/business/article/0,8599,1678581,00.html