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Chart of the Day: Europe and U.S. Decoupling

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There’s been a lot of talk recently of the U.S. and Europe “decoupling.” The U.S. economy has been fairly buoyant lately, while Europe attempts to slouch through its debt crises with a continent-wide austerity program.

This chart from Reuters’ Alpha Now shows that when it comes to industrial production, the US and Europe have dramatically parted ways. Both the U.S. and Europe saw dramatic drops in industrial production in 2008. Both started to recover in 2009.

But last year, as the U.S. kept recovering, Europe began to fall again. And there is now a huge gap between the U.S. and Europe.

The question, of course, is how long this can continue. Europe seems unlikely to recover anytime soon, so the question really becomes: can the US continue to grow if Europe keeps contracting?

(Hat tip: Cullen Roche)

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