Written by Dirk Ehnts, Econoblog101
The high-level accounting for the macro economy is accomplished through analysis of the primary sectoral balances. The beginning of a new year is a convenient time to review the current status of the U.S. economy. Enlarged graphic after the Read more >> jump.
Here are the sectoral balances for the U.S., which can be accessed through FRED here:
To get an updated version of the graph above you can click here to go to the FRED2 website.
It looks like the private sector is starting to save more and/or invest less. The government deficit has stabilized, and so has the current account deficit. Given that the dollar is expensive and global growth weak, demand from the rest of the world will be relatively weak. In order to grow, demand must come from domestic sources then. The private sector, as I just wrote, does not seem ready to go on a spending binge (and into debt) right now, so it seems like expansionary fiscal policy is the way forward. Let’s see what 2017 brings.
Another version of this article appeared at Econoblog101 03 January 2017.
