Weekly Market Update

US Growth Leads the Way in Economic Dominance

The US has consistently led global economic growth, outperforming other developed economies in both expansions and downturns. While Europe shows potential with increased fiscal spending, the US remains the preferred choice for sustained growth and stock performance.

28 March 2025 5 min read

Dane Smith

Head of North American Investment Strategy & Research

Christine Norton

Investment Strategy & Research Specialist

Kyle Murray

Investment Strategy and Research

Saketh Reddy, CFA

Research Analyst, Investment Strategy & Research

In real GDP growth terms, the United States has consistently outperformed other developed economies over the past couple of decades. However, the true measure of US economic dominance is not just its growth rate but its ability to sustain this momentum while being the largest economy in the world. The chart below illustrates this trend, showing that the US tends to outperform in expansionary periods and experience shallower contractions during downturns.

There’s an old saying that goes “the stock market is not the economy”, implying there is a disconnect between the two. While there are times to agree with this, it’s tough to argue against the fact that a healthy economy is supportive of the stock market, especially in a chronic state of superiority. The relative performance of US equities over this time period has largely mirrored this theme.

However this data looks backwards into the past, and markets look forward. It’s generally better to invest with the trend, not against, and investing in reversals is extremely difficult. While there have been some recent developments to like internationally, particularly Germany’s increasing fiscal spending, will this be enough to spur structural growth in Europe and recent equity outperformance? For now, we’re taking the longer view, and continue to have a preference for the US.

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The views expressed in this material are the views of Dane Smith, Christopher Carpentier, Christine Norton, Kyle Murray,and Saketh Reddy Moyilla Sai Shiva through the period ended March 27, 2025 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

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