Gluskin Sheff's
He writes that the comeback of the American consumer "is the upside surprise for 2014," along with a recovery in business capital spending. Here's why:
First, this chart shows that the American consumer, if it were a country, would account for 15% of global GDP.
Gluskin Sheff
So, if the American consumer were making a comeback, OECD economies - particularly those over 50% correlation between their GDP growth rate and the behavior of the American consumer - stand to benefit too.
Gluskin Sheff
So what's behind Rosenberg's optimism for the American consumer?
"Balance sheets have moved into much better shape in the aftermath of the acute five-year deleveraging cycle. They need for more fiscal belt-tightening, which led to personal tax payments running at a double digit annual rate from 2011 to 2013, is all but over and should help augment disposable incomes, which are likely to get a lift in any event from gradually improving employment conditions and a tighter labor market. Plus, there is still considerable pent-up demand, especially given the record old age of the auto fleet and housing stock too. And we are seeing a turn for the better in employment growth for the 25-24 age cohort which bodes well fro real estate and housing-related spending even with mortgage rates tracking Treasury yields higher."
Rosenberg previously said it is "the year of the horse, the one that's about to break out of the gate."