An overwhelming weight in the global economy, archidominant technological giants, an unrivaled financial center, dynamic investment and demographics… Far from being in crisis, the American economy is more powerful than ever.
During his campaign, Donald Trump hammered it home in every tone: he is the only one capable of recovering or even saving the American economy.
The man who is preparing to become the 47th American president played this declinist string to win the election. Which in the eyes of many commentators is nothing more and nothing less than a lie.
“This will be the first time in American history that a candidate has won on the basis of such a huge lie – that we have 'the worst economy ever,'” he wrote in November a columnist in the British newspaper The Guardian.
Because this score is ultimately very easy to play. Voters tend to judge the overall state of the economy based on their personal situation. However, after two years of high inflation, American consumers believe they have lost a lot of purchasing power. If the prices of hamburger meat or sandwich bread have increased significantly, it is because the economy is in bad shape!
However, the data says the exact opposite. American power has perhaps never been so dominant since the Second World War.
26% of global GDP, America without rival
The Japanese threat? A distant memory. European reconquest? No longer really relevant anymore. The future Chinese hegemony? Fewer and fewer believe it.
And for good reason: when the major economies seem to be running out of steam, mired in their real estate, demographic, industrial and social crises, the United States has been outperforming for years.
In 2024, American growth will reach 3.1%, a level three times higher than that of the European Union.
And this is not a temporary “accident”. For years, America has been stronger in crises and faster in recoveries. As a result, since 2011, the weight of the United States in the world economy has increased from 21% to 26% last year. The European Union, which was the world's largest economy just 15 years ago, now accounts for only 17% of the wealth produced in the world. And China, after having climbed sharply, is also stuck at 17%.
If we take GDP per capita, it is even more impressive. According to the IMF, in 1980 an average European produced as much as an average American and a Frenchman produced even more. In 1980 this indicator indicated 12,553 dollars for the Americans compared to 13,070 dollars for the French. Today the GDP per capita in the United States is almost 74% higher than in France (80,412 dollars compared to 46,315 dollars).
Americans, 20% more productive
It's a truism, but if Americans produce more, it's because they are more productive than Europeans. But what is surprising is that the gaps in productivity gains between America and the rest of the world – and in particular Europe – continue to widen.
Philippe Crevel, founding economist of the research and strategy company Lorello Ecodata, warned on BFM Business about the “phenomenal gap” which has been widening for some time with the United States:
“Productivity has grown by 10 to 12% in 20 years in the euro zone, compared to more than 40% across the Atlantic.”
Dropping out is not new. It dates from the mid-1990s. But it has accelerated in recent decades with the rapid acceleration of technological innovation that the American economy assimilates much more than the European economy. Result: the productivity of the Eurozone is today approximately 20% below that observed on the other side of the Atlantic.
And the emergence of artificial intelligence (once again in the United States with OpenAI or Google) could widen the gap even further in the years to come.
34 of the 50 largest stock market capitalizations in the world are American
This is perhaps the easiest to measure. In the world of finance, there is America and the rest of the world. And between the two, a chasm.
Apple, Nvidia, Microsoft, Google, Amazon, Facebook… The giants of the digital world are all American. In the top 50 largest market capitalizations on the planet, 34 are American according to the Marketcap site.
-There are now eight American companies worth more than $1,000 billion on the stock market, compared to none from China or even a single European. The largest market capitalization on the old continent is the Danish laboratory Novo Nordisk which currently weighs 371 billion dollars, or only 11% of the capitalization of Apple, the largest American company.
Digital technology has notably enabled American giants to establish themselves throughout the world more easily and at lower cost, in sectors of activity which were formerly run by local players. In media and entertainment, Netflix and Amazon Prime compete directly with local channels. In commerce, Amazon is establishing itself all over the world and taking share from local major distribution players.
8 of the 10 best universities in the world
America is attracting brains more than ever. This is of course nothing new. Already in 2006, the European Commission was alarmed that a growing number of young Europeans were leaving the Old Continent to train and work in the United States.
The phenomenon has not weakened since then, quite the contrary. With the global diffusion of information and the dominance of the reputation economy, America is ever more dominant.
In the Academic Ranking of World Universities (Arwu) known as the “Shanghai Ranking”, there are eight American universities in the top 10 and 15 in the top 20. Only a small handful of British universities and the French Paris-Saclay manage to slide into this world ranking.
America invests 5% of GDP in new technologies
If the United States dominates the technological world it is not the result of a happy coincidence. This is because businesses there are less cautious than elsewhere, particularly in Europe.
“Investment in new technologies represents 5% of GDP in the United States and 2.8% of GDP in the euro zone in 2022, indicates Patrick Artus, chief economist at Natixis. Regarding research and development spending in 2022 , they reach 3.5% of GDP in the United States and 2.3% of GDP in the euro zone.”
So if the business investment rate is practically the same at the start of 2024 in the United States and the euro zone, America is investing much more in its future (new technologies, R&D) than other major economies.
And this is directly linked to the question of productivity mentioned above.
“When we compare OECD countries, we see […] the following effects: an increase of 1 point in the rate of investment in new technologies leads to an increase of 0.8 points per year in productivity gains, explains the economist. Similarly, an increase of 1 point of GDP in research and development expenditure leads to an increase of 0.9 points per year in productivity gains.
Thus, while Europe is facing an “existential challenge” according to Mario Draghi, author of a report on the subject last November, the United States is ensuring its future prosperity today.
The working population grows by 0.5% per year in the United States
Demographics to conclude. While the drop in the number of births in France is worrying and is expected to handicap French production in the years to come, American demographics are holding up much better.
The American fertility rate was 1.66 children per woman in 2022 compared to 1.46 in the European Union and 1.18 in China.
Moreover, as economist Hillel Rapoport reminds us in this column in The Worldeconomic immigration, particularly of the most qualified, is much higher than in Europe.
The result is that the active population continues to grow across the Atlantic at a sustained pace in Europe, without even talking about Japan or China where it is already declining.
“The working age population will continue to increase by 0.5% per year” between 2020 and 2050 in the United States, while it will decrease “by 0.2% per year in the euro zone”, indicates Patrick Arthur.
A younger American population and also better integrated into the job market. The United States has been at full employment for years (4.1% unemployment rate) while neither Europe (6.3%) nor China (5.1%) are.
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