Market Overview

U.S. Workers Are "Most Productive" in the World, Says Goldman's Cohen

Abby Joseph Cohen, a partner and chief investment strategist at Goldman Sachs (NYSE: GS), tells Bloomberg Television that American workers are "more productive than those in other industrial economies."

"Our economy is doing better," she added. "I'd also point out that our financial system in the United States seems to be much further on the road to recovery than is the comparable system in other parts of the world."

Speaking to Bloomberg TV's Sara Eisen, Cohen said that it is "clear that many people have forgotten that the U.S. is still by far the world's largest economy."

"Even with its outstanding growth over the last decade, the size of the Chinese economy is only about 40% of the United States," she said. "So clearly what happens in the United States has a significant impact on the rest of the world. Right now the U.S. economy is growing. Not as rapidly as we would like but it seems to be good, solid, steady growth."

Despite China's growth in the world economy, Cohen believes that there is some deceleration underway in that nation. "On a long-term basis, we think growth there will be good," she said. "But when we look at the other industrial economies, clearly the U.S. at this point seems to have a cyclical advantage and in some ways a structural advantage."

With regard to the U.S. stocks outperforming Europe and China, Cohen said that this was driven by valuation. "At the end of 2011, what was priced into the U.S. equity market was five years of profit declines -- never really a probable scenario, but investors were so nervous about so many things, that's the way our market was priced," Cohen explained, adding that her feeling is that the next recession is some "significant distance off into the future."

Cohen also spoke to Bloomberg TV about her forecasts for the coming earnings season. Most significantly, she said that investors seem to be "much more comfortable about the intermediate term in the United States than they were even just a few weeks ago."

"That is the sign of a continuing bull market," said Cohen. "It doesn't mean that the gains from here or the gains we've seen thus far should be extrapolated, but it does suggest that equities will continue to see some positive move. And one of the things, of course, to consider is the relative nature of stocks and bonds."

Finally, Cohen addressed the global economy, saying that she expects long-term growth from the "advanced emerging economy."

"Not just China but Brazil, India, and some others," she said, adding that we have to recognize that the U.S. has suffered a "significant cyclical beating." But in terms of innovation, the U.S. still holds more patents than any other nation and invests more heavily in R&D.

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