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The situation of the United States is a concern despite its technology sector. The Natixis analyst team lays out four reasons to be worried about the US economy.

Key quotes

“The long-term outlook for the automotive and aerospace industries has deteriorated and the weight of these industries and their contractors is quite high.”

“The fall in oil and natural gas prices means that shale oil and gas production is no longer profitable in the United States. The number of rigs has already plummeted, which points to significant job losses in these sectors.”

“The sharp rise in unemployment, due to companies’ rapid payroll adjustment, is going to lead to a sharp rise in household loan defaults and therefore probably to a banking crisis and a sharp fall in residential construction.” 

“If the eurozone manages to set up a European investment fund to absorb its excess savings, then the eurozone’s external surplus would disappear. Also, the low level of oil and natural gas prices is eroding OPEC’s external surplus. The eurozone and OPEC may then no longer have external surpluses to finance the United States’ external deficit and fiscal deficit . The resultant financing problem would drive up long-term interest rates in the United States.”