The impressive asymmetry between the US and European economies today

The US economy posted negative growth in the first quarter of 2022 due to destocking, lower public spending and deteriorating foreign trade; private domestic demand remained buoyant in the first quarter in the United States, due to the decline in the household savings rate and high corporate profitability. The euro-zone economy posted very weak growth in the first quarter of 2022, due to the decline in household consumption linked to the decline in purchasing power and the slowdown in corporate investment, despite the positive contribution of foreign trade. We see the complete asymmetry between the United States and the euro zone: resilien t private domestic demand and deteriorating foreign trade in the United States, resilien t foreign trade and deteriorating private domestic demand in the euro zone. This asymmetry results from: The deterioration in household and business confidence in the euro zone, but not so much in the United States, leading to stimulation of domestic demand through a fall in the savings rate in the United States. The reason could be that the war in Ukraine is having a much more drastic impact on Europe than on the United States; The fact that the rise in oil and natural gas prices is taking a toll on the income of domestic economic agents in the euro zone, but not in the United States; The fact that strong domestic demand is worsening foreign trade in the United States, while weak domestic demand is improving foreign trade in the euro zone. It is striking to see this perfect asymmetry between the two economies, which will also reinforce the asymmetry between monetary policies.