The United States of America, like much of the developed world, has been going through difficult economic times in recent years. A housing crash in early 2008 caused a cascade of effects, which adversely impacted both the stock market and employment. Despite these challenges, however, one thing remains clear, macroeconomic trends involving natural resources and technology both point to an upswing for the country.
According to the prestigious magazine the ‘Atlantic’, the United States has no fewer than "three reasons to be optimistic" about the future. These are the rise of AI (artificial intelligence) technologies, the growing prospects for oil and gas from shale sources and a middle class coming to prominence for the first time in large parts of Asia. These will serve to create a rosy export future for the USA and with increased exports will come a return to robust employment and everything associated with it, including stable housing values.
Fossil fuel recovery - the jobs picture
The ability to extract fossil fuels from previously unrecoverable sources will be a "god-send for the American working class", according to the ‘Atlantic’. These sources include areas rich in a type of rock known as shale and there are extensive regions of the United States that are rich in shale gas and oil deposits. Even better, from an employment standpoint, is the fact that shale wells tend to be short-lived; the result is extensive re-drilling. Although this may not be highly advantageous for the producer, it creates an on-going demand for workers, thereby brightening the employment prospects in the regions concerned.
The future for the US economy - manufacturing jobs
The rise of artificial intelligence technologies is another factor that could see the creation of American jobs or more properly, the return of previously outsourced jobs. While wage rates in China will remain far below United States levels, as more manufacturing tasks are performed by machines rather than humans, the Chinese advantage will fall in direct proportion to technological leaps. Eventually, the Chinese advantage may be so diminished that it makes little sense to pay the huge transportation costs involved in manufacturing in Asia for the US market.
At that point, analysts say, manufacturing jobs will return to American shores. True, the new factories that spring up will feature fewer jobs than was previously the case; however, they will still represent a net increase in employment. In addition, the jobs likely to exist in these largely-AI factories will be technical positions that pay much more than a mere living wage.
Effects on the housing market
More employment naturally leads to increased demand across the spectrum, including the housing market. These trends will therefore serve to stabilise a faltering market and over time their positive effects may well make housing the kind of successful investment that it was for decades prior to the crash that came at the end of the second Bush presidency.
As the United States returns to the position of a strong exporter, its fortunes will be further buoyed by the increasing prosperity in regions such as Asia. Indeed, the new middle class there could become a strong customer base for US products, an almost perfect reversal of the current situation.
In the final analysis, this may be an excellent time to invest in US housing stocks.
