As for the U.S. economy, it performed well in 2014 and should strengthen further this year – largely due to more robust household spending. U.S. unemployment continues to decline; cheaper oil is boosting real incomes and consumer sentiment; and there is continued support from accommodative monetary policy.
So what is the catch? The oil price and U.S. growth are not a cure for deep-seated weaknesses elsewhere. Too many countries are still weighed down by the legacies of the financial crisis, including high debt and high unemployment. Too many companies and households keep cutting back on investment and consumption today because they are concerned about low growth in the future.
In fact, the United States is the only major economy that is likely to buck the trend this year, while others are being held back – mainly by lackluster investment. A promising recovery continues in the UK, but growth remains very low in the Euro Area and Japan. And emerging economies, led by China, are slowing down, relatively speaking.