London Daily

Focus on the big picture.
Wednesday, Oct 22, 2025

Opinion: No, the US is not the 'weak link in the global economic recovery'

Opinion: No, the US is not the 'weak link in the global economic recovery'

The Associated Press wrote a story that claimed the US was the "weak link in global economic recovery." There's no doubt that the US response to the COVID-19 pandemic has been a mess compared to the rest of the world, but our economy has been doing relatively better compared to other countries. Housing, industrial production, and other economic indicators have held up decently.
Neil Dutta is the head of economics at Renaissance Macro Research.
This is an opinion column. The thoughts expressed are those of the author.

On Tuesday, the Associated Press published an article making what may seem like an intuitive claim: "Virus surge makes US weak link in global economic recovery."

"People in China are back to buying German luxury cars. Europe's assembly lines are accelerating. Now the global economy is waiting for the United States to get its coronavirus outbreak under control and boost the recovery, but there's little sign of that," the article argues.

But despite the AP's assertions, I take issue with their argument. While the US could be doing better, its economic performance across a variety of metrics looks better than Europe or Canada. That makes it a stretch to call the US economy the weak link in the world.

Let's state the obvious. The US performance in dealing with the spread of coronavirus has not been good, across a wide range of metrics. Until very recently, cases were accelerating and hospitalizations were high. Our assumption is that the recovery could have been stronger if the virus was brought under control sooner.

However, America's poor performance in dealing with coronavirus has not translated particularly neatly with respect to economic data when compared to countries that are thought to have done a better job with the virus. Let us explain.


Industrial production is rebounding in US

Start with industrial production. Since most of what is manufactured is tradable goods, industrial production is useful in assessing global activity. The AP notes that "Europe's assembly lines are accelerating." That's true, but the US is also seeing manufacturing growth. Indeed, against most of its European peers, US industrial production fell less in the height of the pandemic and it has recouped more of its shortfall relative to the February pre-pandemic peak.


Job openings in the US have picked up

Let's turn to job openings, which can be thought of as a proxy for labor demand. Indeed, the popular job finding website, publishes job posting activity weekly by country. The US has seen a relatively shallow drop in job listings and has seen much more of a rebound than its European counterparts. So, while the US labor market has softened, job openings, a forward looking indicator, appear to suggest a faster recovery in employment is on the way.


V-shaped recovery in housing

Next, you'd be hard pressed to find a country that has enjoyed a more rapid housing market recovery than the United States. In the US, housing market activity is enjoying a V-shaped recovery with mortgage purchase applications and home sales at cyclical highs. It's quite likely that home construction will follow suit. In the UK, mortgage approvals are barely half their recent peak. While the US housing market isn't exactly a big driver for global activity, it's hard to see why it hurts!


Retail sales: same story. US looks okay

Retail sales tell a similar tale. Again, like industrial production, the story here is one where the US suffered a shallower drop while seeing a fairly quick turnaround. The level of US retail sales is higher than it was in February. Many countries cannot say the same. The recovery can be traced at least in part to strong income support schemes. While it is certainly a risk that support is being pulled too soon, it is hard to establish that the US consumer has been a weak link in the recovery to this point.


Dining out is a problem

nTable indicate that US restaurants are lagging far behind counterparts in Europe. In the US, seated diners at restaurants are off nearly 60%, in Canada this measure is off about 40%, while Germany is up 11%. Of course, the virus is now spreading more rapidly across Western Europe and there is some chance restaurant consumption slows in Europe while picking up in the US in coming weeks.

US not doing well with COVID but not a weak link either
In short, it should not be too surprising that US stocks are outperforming the rest of the world. The US economy has been too. We've seen continued outperformance of US equities against the MSCI World ex-US.

Two things can be true at the same time. Yes, the US has not done a good job containing the coronavirus, but the evidence does not really support the US being a weak link in the global recovery. It's done reasonably well compared to those countries in Europe that are thought to have handled the pandemic well.

Newsletter

Related Articles

0:00
0:00
Close
‘Frightening’ First Night in Prison for Sarkozy: Inmates Riot and Shout ‘Little Nicolas’
White House Announces No Imminent Summit Between Trump and Putin
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
×