As the United States and Germany prepare to compete in a World Cup match on Thursday in Brazil, some sports commentators are saying that the Europeans – ranked No. 2 at the tournament – may have the advantage over the U.S., ranked 13th.
But off the soccer field, it’s really “no contest,” according to John Canally, economist and investment strategist for LPL Financial (LPLA), in a report shared Wednesday.
Figures in the chart posted here show the Americans have “Germany beat in nearly every key economic and demographic category,” he wrote. Also, the U.S. economy “is poised to outperform Germany in the years ahead thanks to better demographics, better productivity and a more focused central bank.”
“Today the U.S. economy is in far better shape than the German economy: Advantage USA,” Canally explained.
In terms of size of their respective economies, the U.S. economy is over four times as large as that of Germany, measuring $17.1 trillion vs. $3.8 trillion.
Also, the U.S. economy has expanded 50% faster than Germany’s over the past five years.
“German banks’ lending to the private sector has dropped more than 4% over the past year. Meanwhile, the U.S. economy is benefitting from a 4.5% increase in bank lending to the private sector over the past year,” the LPL Financial expert said.
Though U.S. inflation rate is running at 2% vs. 0.6% in Germany, the United States has its own currency and central bank to wrestle with inflation. Germany, of course, shares its currency and central bank “with 17 other soccer-mad European neighbors,” Cannally joked.
Still, Germany’s unemployment rate, 5.2%, is lower than that of the U.S., 6.3%.
However, he notes, an agreement between the German government and German corporations “keeps the unemployment rate artificially low.”