U.S. factory worker in Dublin Va. Volvo plantA presidential election year is fast approaching. And as politicians and the press know well, few things get voters' attention like talk about the U.S. losing its economic advantage to other countries.

It shouldn't be surprising, then, that both parties have upped their rhetoric on what America needs to do to stay ahead, and major press outlets are featuring the story prominently.

But investors should be more discerning when it comes to the constant metaphors used to frame the world economy as if it were a war or zero-sum competition. While worries about China overtaking the U.S. get plenty of ink, investors should remember that economies cooperate as much as they compete when it comes to how things work on the world stage.

And as fast-growing emerging-market economies trigger a U.S. manufacturing boom that's finally showing marked job gains, that cooperative element of world trade is on full display.

Production and Hiring Are Surging

Fears of currency wars generated plenty of unneeded anxiety last year, and shrill accusations of countries stealing jobs from each other continue to abound. But rather than merely creating competitors, the red-hot growth in emerging economies also helps the developed world. Despite widespread cynicism about their prospects, manufacturing powerhouses like Japan and Germany are getting a major boost from the rise of the developing world.

The U.S. is witnessing a much-needed manufacturing renaissance as well. Production across the country is surging, and that's leading to big employment gains in the manufacturing sector.

Goods-producing employment rose by 70,000 in February, led by "healthy manufacturing gains" of 33,000, analysts at TD Economics wrote in a research note this week. Given the pessimism that has plagued the U.S. outlook, the potential for a virtuous cycle may have been easy to dismiss.

Consumer Strength Is Undermining the "New Normal"

A year ago, some analysts had bucked the prevailing gloom to predict that rising emerging-market demand would trigger a manufacturing boom in the U.S. and help rebalance the domestic economy. But a far more pessimistic outlook put forward by bond giant Pimco, which it called the "new normal," got all the attention. According to that view, investors would have to go overseas to find growth as U.S. consumers focused on paying down debts for years and dampened demand at home.

While the "new normal" got the spotlight, instead it's the "new mix" view that's proving to be correct. For starters, the U.S. consumer is hardly as moribund as those in the "new normal" camp were predicting. As job losses abate, consumers are becoming more confident and willing to take out loans again. Witness the unexpected gains in consumer credit in to start off the year.

Increased hiring is likely to make consumers even more comfortable and boost overall demand. And booming global growth is further helping U.S. consumers, much as the "new mix" camp predicted.

"Jobs -- at leas in the private sector -- appear to have finally showed up at a party that started a long time ago," analysts at TD Economics wrote. "Economic growth is likely to accelerate further in the second quarter, which should make [200,000 plus jobs a month] the new normal." At that rate, in the coming year the U.S. will make up for 2.4 million of the 8.7 million jobs lost during the downturn.

A Healthy Rebalancing Is Underway

Other analysts also see the potential for strong manufacturing sector job growth ahead. Working off data from the Conference Board, analysts at Ned Davis Research wrote in a research note that hiring is expected to continue in March in both manufacturing and services.

"Notably, the net share of manufacturing firms planning to add to their payrolls rose to the highest since July 2007," the analysts wrote.

As presidential elections get closer, politicians will espouse plenty of big ideas to get America on the right track. But investors should take the rhetoric with a grain of salt. A healthy rebalancing of the world economy is already underway, and the U.S. is far more competitive than it's often given credit for.

Increase your money and finance knowledge from home

What are Penny Stocks

The lucrative and dangerous world of penny stocks.

View Course »

Income Investing

Grow your nest-egg.

View Course »

Add a Comment

*0 / 3000 Character Maximum

427 Comments

Filter by:
Dereck

Major Fraud Alert


The entire Federal Banking System under FirstGov has been "Consumed" and "Levied" by way of a Maryland State Circuit/District Court Ruled “Appropriation and Garnishment” of all Future Earnings prior to and after 2004 against Bank Of America by way of the F.D.I.C. Regulations Prohibiting failing Banks from Merging with other failing Banks between the Dates of 08/04/08 and 10/09/09.

Bank of America violated the 21st Century Act: Final Amendments to Regulation CC Section: http://www.federalreserve.gov/boarddocs/press/bcreg/2004/20040726/attachment.pdf

seeking reimbursement of Credit, Loan, and Finance Balances as a "Bank Entity" and not a "Nonbank Consumer" as specified on Pages 85 and 86.

The person they sued through a LLC. Debt Collection Company and Law Firm was the "World Fortune Owner" who "Counterclaimed" and won.

Now all Contracts of any Corporations (Including Employment) under the "Controlling Interest" of any Investment Bank Worldwide are "Null and Void", and are also under the stipulated Rules and Regulations of an "Closely-held S Corporation rendering all Employed under Legal Actions against “Domination”, and also means that "No Corporation can hold Shares" officially making every Stock Exchange on the Planet a "Ponzi Scheme" by default.

Businesses owned by the States (Public Corporations) are being sold Stock Shares by Corporations also under the Federal Banking System in this Worldwide "Ponzi Scheme". The World Fortune Company Merrick Inc. Sweden is dissolving Millions and Billions of Dollars from "All Levels of Government"in the U.S. of Financing based upon Years of "negligent inaction" involving this case.

The Federal Government has already been forced to discontinue supplying the Financing States use to pay their debts, Persons in Government Offices may want to begin to take their jobs more seriously, these are different times from 10 Years ago and you will not be accepted civil servants here just because you say you are here to do the right thing.

May 29 2011 at 12:40 AM Report abuse rate up rate down Reply
inasctg56

It sure is nice to have an administration that works with our manufacturing sector, negotiates better trade deals, enforces existing trade laws, and passes legislation that supports manufacturing in this country by 100% write offs for improvements. THe gop's throwing tax money at business and hoping it trickles down doesn't work, especially when they passed legislation in 2004 for overseas profits to be taxed at only 5.25%, which Eric Cantor wants to bring back. The gop is all about record profits overseas - they sold us out. But it just goes to show what can be done when you have dem's fighting on our side.

March 13 2011 at 12:00 AM Report abuse +1 rate up rate down Reply
harleydavid105

Buy American. If you can't support your country don't expect your country to support you. As JFK once said, "Ask not what your country can do for you, ask what you can do for your country." AMERICA. LOVE IT OR LEAVE IT.

March 10 2011 at 1:59 PM Report abuse +3 rate up rate down Reply
r42eklund

Does anyone pay any attention to what's happening to the US workforce and why semi-skilled and skilled jobs are going "off shore"? Okay, hint here, why are unions that represent manufacturers (not government or service) companies loosing members? Come on Forrest, you can put it together. The semi-skilled and skilled employees represented by unions have priced their labor out of the market in the USA.

When it costs an auto manufacturer $40.00 and hour for a union employee to put lug nuts on a car and they can get the same job done in Mexico for a total cost less than $6.00 and hour, it doesn't take Stephen Hawkins to figure out where the lug nuts will be installed.

Funny thing is that all of the progressives that are screaming for the return of jobs to the US are vested in retirement funds, pensions and the like who are demanding, wait for it, higher returns on their investments!

Doesn't it seem that the same people who are demanding a higher return on their investments are complaining about those greedy big corporations that they are invested in?

So Joe Six-Pack in Wisconsin that is calling his duly elected representivies "Cowards" for voting against the unions that are driving away jobs is hoping to pocket the fruits of those nasty people that are funding their pensions?

Face it Gomer, you can only have it one way or the other. If the nasty big corporations need to pay more taxes and those selfish rich people need to be soaked and the workers need more pay and better benefits then you are going to have to move to Wonderland, because they all can't happen at the same time, even over time. Oh, and creating huge government debt will result in higher taxes for someone and ultimately it is the worker that pays those taxes, either in actual taxes, the price they pay for products that they buy or in lost wages and benefits.

Do US all a favor and start thinking your position through, from start to finish. Tax the rich guy is not a plan. Tax the BIG CORPORATIONS is not a plan. They just pass the increased costs on to, wait for it, YOU!

If you want to do something, go out an get a job and demand that you earn what you are paid. Then, don't vote for any politician that says they will make it all better by creating more Government (read more spending).

Last I checked poor people are gonna be poor if you pay them or not. Know someone that is really sick, go to your church or the Boy Scouts or where ever and raise funds for that needy individual. But don't demand that you and I pay more taxes to pay for everyone that has a backache.

March 09 2011 at 11:17 PM Report abuse -2 rate up rate down Reply
2 replies to r42eklund's comment
bggdg

That'll be just about enough thinking out of you. You want to short circuit the whole herd, or something?

March 10 2011 at 10:45 AM Report abuse rate up rate down Reply
harleydavid105

Wages are higher in the US because products and services cost more. Instead of our wages dropping to the poverty level the US Gov't should insist that other countries raise their pay scale to be more in line with ours. If not we should tax all imports so the prices are in line with American made goods.

March 10 2011 at 1:45 PM Report abuse +2 rate up rate down Reply
gjghjghj1

input this URL:
----http:// www. buygreatshoes. org
you can find many cheap and fashion stuff

(jor dan s-h-o-e-s)

(nike air max)

(nike s-h-o-x)

(PUMA s-h-o-e-s)

(KOBE,JAMES s-h-o-e-s)

(CL,GUCCI,LV,COACH high-heel shoes)

(BOSS,LV,D&G,DIOR,BALLY LEATHER SHOES)

(UG G b-o-o-t)

http://www. buygreatshoes. org

WE ACCEPT PYAPAL PAYMENT
YOU MUST NOT MISS IT!!

March 09 2011 at 8:36 PM Report abuse rate up rate down Reply
fpfp040408

what does Huckabee and Palin and O.Donnell and Bachmann and Angle and Beck and Limbaugh and Christie and Paul ALL have in common ? They are all crazier than Charlie Sheen

March 09 2011 at 1:02 PM Report abuse +2 rate up rate down Reply
fpfp040408

Dow Jumps 124 Points as Oil Dips and Bank Stocks Rally

See full article from DailyFinance: http://srph.it/etnI2I

March 09 2011 at 11:54 AM Report abuse rate up rate down Reply
1 reply to fpfp040408's comment
fpfp040408

al - you must be Republican as that is all they say and that is all they contribute

March 09 2011 at 12:57 PM Report abuse +1 rate up rate down Reply
fpfp040408

THANK YOU PRESIDENT OBAMA ! OBAMA = 2012 = A SURE THING !

March 09 2011 at 11:48 AM Report abuse rate up rate down Reply
fpfp040408

United States Department of Labor stated that unemployment is way down and CURRENTLY is 8.9 % ( go to www.dol.gov for 100% proof & confirmation of this FACT

March 09 2011 at 11:46 AM Report abuse rate up rate down Reply
1 reply to fpfp040408's comment
bggdg

"Way down" from when?

March 09 2011 at 2:10 PM Report abuse rate up rate down Reply
fpfp040408

United States Department of Labor stated that unemployment is way down and CURRENTLY is 8.9 % ( go to www.dol.gov for 100% proof & confirmation of this FACT

March 09 2011 at 11:45 AM Report abuse +1 rate up rate down Reply