What is the biggest advantage the US economy enjoys? Ever thought about it? Well it is the consumer spending. $11 trillion of consumer spending each year shields the US economy from the global financial meltdowns. China does not enjoy this huge advantage. China is trying to build its domestic consumer spending which can take many years. So right now US domestic spending is the biggest in the world. This consumer spending shields the US economy from outside shocks.
The combination of more jobs, falling gasoline prices and low borrowing costs will help lift household purchases. Such tailwinds probably matter more than Europe’s struggles or the slackening in emerging markets that caused the Dow Jones Industrial Average last week to erase its gains for the year.