US Market

American Economy Recent Trends

Sectoral Overview
Income of the farm sector in America was 60 billion dollar in 2006. It is expected to go up by another $6billion in the 2007 fiscal much higher than the last 10 year average farm income of $57 billion.

Service Sector in American economy has seen a 6.3% increase in the 3rd quarter of 2006 in comparison to the 2nd quarter of the same fiscal. During this period the revenue accrued by the services sector is 283.1 billion dollar.

Production Sector in is going through a roller coaster ride. In March 2007 this sector had recorded a dismal performance with a negative growth of 0.3% but it has managed to post a positive growth of 0.7% in April 2007. The average rate of profit (after adjustment of tax) of the Manufacturing, Mining and Trade has increased at the rate of 8.1% during the fourth quarter of 2006.

Retail Corporation industry has posted a profit growth of 3% in the third quarter of 2006.

Market Performance of American Economy
Performance of the US market can be gauged by seeing the movements of the major financial indices of USA. Share index tries to capture the overall picture of the of the share market. It is created through the selection of a set of shares out of the whole array of stocks which can represent the mood of the overall market or a segment of the share market or a specific sector. Stock indexes work as a source of information for the economy as a whole.

Some of them are Dow Jones Industrial Average, NASDAQ, S&P and NYSE Composite. As on 14th June 2007 Dow Jones Industrial Average was 13,489 up by 0.53% from previous close. On the same day NASDAQ has posted a positive growth of 17.10 points (+0.66%). S&P 500 Index is also in the upswing with a rise of 7.30 index points. NYSE Composite Index New has recorded a robust 63.29 point increase from previous day indicative of a formidable performance.

Hence it can be deciphered that the market is in the upbeat mood with good expectations from the future performance of the US economy.

Export and Import
The main export items of US are Wheat, Cotton, Feed Grains (Corn, Barley, Rye, Oats and Grain Sorghum), Oilseeds (Soybean, Soybean Oil, Cottonseed, Sunflower Seed Oil, etc.), Rice, Hides and Skins of Cattles, and Beef. Wheat, Corn and Soybeans are the most exportable items of USA. Latest data show that US export of Soybeans to China has increased from 454,000 to 2,092,000 within four years (precisely, from 10.22.03 to 16.05.07).

Export prices increased by 0.1%in May'07.Major contribution to this was from the non-agricultural items. In the fiscal year ending in May 2007 has seen a growth in its prices by around 3.5% whereas the overall export prices has posted an increase of 4.3%.

Increase has been witnessed in the overall imports of the United States. In May 2007, it has seen a growth of 0.9%. The most important import item for US economy is petroleum whose price has increased by 2.7% in May'07. Whereas the non-petroleum import prices has only increased by 0.5% in the same month. If we consider the last fiscal year then we would see a 4.6% dip in the petroleum price index whereas non-petroleum import prices increased by a formidable 2.8%. During the same period capital good prices has declined by a marginal 0.1%.

Balance of Payment and International Relations
American economy is going through ups and downs. The deficits accrued in the international trade has a secular trend. But when we consider the short term chart we find a zig-zag motion. US economy is constantly observing an increasing trend in international deficit (export exceeding import) in goods and services. This deficit was above 57 billion dollars in February 2007 which scaled up to 63.9 billion dollars in March'07 which has again decreased to $58.5 billion in April2007. Trade deficit increases when import exceeds export and vice versa.

US is facing stiff competition from the new economic wonders like China and India. These countries are coming together along with Brazil and Russia, in business terms, to form BRIC. This alliance is rising fast to become another composite competitor like the already powerful European Union. In addition to all these, the Latin American countries, monopoly market of USA, are on a spree of Government change from pro-American to Pro-Left. So, the almost monopolized grip of America on these countries is slowly but surely slipping.

Conclusion
In this globalized world, America is facing stiff competition from many countries and their cartels. But everything is not all that gloomy. Its economy is fundamentally sound from GNP, GDP and National Income perspectives. All these factors have a positive upward trend. At the same time the unemployment rate is also under control, that is below the 5% mark which is still wooing people from other countries to move to America in search of a better living.