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As I explained last week, one of the effects of the comparatively strong U.S. economy is that the dollar grows stronger vs. other major currencies. The appreciation of the dollar has been particularly noticeable vs. the euro: in May last year a euro cost almost $1.39; last week the exchange rate was down to $1.06 per euro.
A stronger dollar has two effects on the U.S. economy. The first is related to inflation: while our imports are small as a share of GDP compared to other major industrialized countries, there is nevertheless a direct tie to household cost of living. Much of our daily consumer goods are imported, and not just from China. Increasingly, major retailers like Wal-Mart are buying from South Asian and African countries. A stronger dollar will reinforce this trend, with the effect of continued downward pressure on consumer goods prices: in addition to the lower production costs the strong dollar allows foreign manufacturers to sell at low prices in the United States and still rake in good profits.
In this part of the Wyoming Wellness series we look a bit more closely at a few of the specific wellness indicators related to child and teen deaths and teens who are not in school and not employed. Our starting point for following these wellness metrics is the 2014 Child Wellnessreport published by the Annie E. Casey Foundation’s Kids Count initiative.
The big news in the global economy right now is that the U.S. dollar and the euro are very close to parity, in other words one dollar for one euro. Since its launch a decade and a half ago the euro has been the higher valued of the two currencies, with an exchange rate in the $1.20-$1.30 bracket for most of the time.
This global currency event is not only important for investors and businesses in general, but it will have an impact on the Wyoming economy as well. Our natural resources industry is exports-oriented; the combination of plunging oil prices, a business-cycle downturn in China and the persistent stagnation in Europe has already put our biggest industry under pressure. The heydays of 2003-2008 are long gone. A stronger dollar adds another bitter pill to the menu.
According to the 2014 Child Wellness ranking, published by the Annie E. Casey Foundation’s Kids Count initiative, Wyoming ranked 19th out of fifty states. Many of the tracked child wellness indicators are strongly linked to juvenile justice in that children with disadvantages in one area are more at risk for failure in others.