More handpicked essays just for you.
Economic indicators and how they influence the whole society
Economic indicators and how they influence the whole society
Positive and negative effects of inflation in an economy
Don’t take our word for it - see why 10 million students trust us with their essay needs.
In order to assess the current state of the economy, the examination of important economic indicators or variables has always played a vital role in the understanding of the complex economic systems we live in. The analysis of these economic variables studied by many, not only has served as a tool to evaluate the current economic performance of a country, but also has allowed experts to envisage and continue the pavement of an economy's road. Currently, some economic variables have had favorable improvements indicating a general good outlook for the economy for the following months, requiring a further individual analysis and comparisons in order to foresee crisis or successes. One of the important economic variables being tracked is the consumer price index released by the Conference Board every month. Lately, people have claimed the economy seems to have a fair projection for consumer spending to some extent based on a 3.2 index increase in the last report. More specifically, thanks to the recent spending of the top 15% households comprised by higher income families, according to the report made by Kathleen Madigan of the Wall Street Journal in the article "Vital Signs: The 15%ers Are Feeling Better — and That’s Good for Economy’. However, the article and the chart posted note an important observation regarding the study of this trend. In 2012, the Commerce Department data implied the economy would suffer as high-income consumers felt nervous about the state of the economy generating a cutback in spending. Nevertheless, the trends seems to be different nowadays given that the economy is reacting to a new financial atmosphere in a new season. The data presented by Commerce notes wealthier families have decreased their spe... ... middle of paper ... ...t a winter can have on people preventing them to go out to look for a job, the core inclination that this variable seems to be taking appears to be favorable for the economy. Therefore, one can expect to presence upcoming favorable improvements in terms of hiring and unemployment rate, but ideally it would be better to not make rambunctious assumptions in this aspect, and see how the real state of the economy in terms of unemployment develops over the next months. In summation, based on these three but important economic variables one can expect slight improvements for the economy in different aspects. The best news appear to be an expected rise in projected consumer spending, while a steady unemployment rate is expected, and small but substantial growth in GDP seems to be around the corner thanks to an encouraging PMI that reports expansion at a lower rate.
Macropoland, a natural gas and oil importer, has a natural rate of unemployment of about 4.5% and a long run average rate of inflation of about 2%. However, there are two specific time periods where these rates fell below their potential. During the period between 1973-1974, the country had an inflation rate of about 15%, with an unemployment rate of nearly 13%. And now, they are experiencing an unemployment rate of 9% and an inflation rate of 0.4%. As their new economic advisor, it is my job to explain these two time periods.
In conclusion, the current macroeconomic situation in the United States is characterized by moderate growth because of better economic conditions that were brought by the events of 2013. The country has experienced moderate economic growth since the 2008 global recession but has shown real signs of momentum. While the country is not concerned about recession or inflation, the rate of unemployment is still a major challenge despite improved consumer and business confidence. As a result, the Federal Open Market Committee or Federal Reserve System needs to adopt fiscal and monetary policy initiatives that help address the unemployment issue and promote high economic growth.
Economic indicators are Governmental statistics, released on a regular basis, which indicate the growth and health of a country. Economic indicators often affect and influence the value of a country's currency. The Trade Deficit, the Gross National Product (GNP), Industrial Production, the Unemployment Rate, and Business Inventories are examples of economic indicators. We will be dealing with four specific indicators: interest rate, inflation, unemployment, and employment growth as well as Real Gross Domestic Product (GDP). Real GDP is so called because the affects of inflation and depreciation are accounted for in the figures.
To conclude, I believe it is understandable by now that for a consumer who is a saver in the first period has not become worse off and in some occasions where the income effect exceeds the substitution effect has become better off. On the other hand a borrower in the first period has definitely become worse off than before.
State of the Economy is apart from the geopolitical and other uncertainties; the forces affecting demand this year appear, on balance, conducive to a moderate strengthening of the economic expansion.
Add Changes in the Gross Domestic Product (GDP), Income/Wages, Consumer Price Index (Inflation), Currency Strength, Corporate Profits, and Balance of Trade to bullet point list.
The most often cited cause of the decline of the middle class in the United States is stagnant wages. Between 1955 and 1970, real wages adjusted and inflation rose by an average of 2.5 percent per year. Between 1971 and 1994, the average growth of real wages was 0.3 percent a year. The stagnation of wages has been especially noticeable to middle-class people, who rely very much on the money they make at their jobs. Recessions seem to hit higher income households much harder, which sends them down to the middle class. Middle-income households may or may not be more likely than higher-income households to qualify for unemployment compensation when jobs are scarce. But those who do are more likely than high-income households to receive benefits that replace a greater share of their regular wages, which helps them maintai...
The United States economy is racing ahead at dangerous speeds, and it may be too late to prevent the return of widespread inflation. Ideally the economy should move ahead gradually and grow at a steady manageable rate. Mae West once stated “Too much of a good thing can be wonderful” and it seems the U.S. Treasury Secretary agrees. The Secretary announced that due to our increasing surplus and booming economy, instead of having an outsized tax cut, we should use the surplus to further pay down the national debt. A tax cut, though most Americans would favor it initially, would prove counter productive. Cutting taxes would over stimulate an already raging economy, and enhance the possibilities of an increase in the rate of inflation. Paying off the national debt would actually help lower interest rates and boost investments, and therefore further increase the wealth of the population, while keeping inflation at bay.
“Macroeconomic indicators include economy-wide phenomena such as unemployment rates, national income, rates of growth, gross domestic product, inflation, and price levels” (Page & Stevens, 2005).
According to the Conference Board Inc., the consumer confidence index at 79.7 in September 2013 up from the recession low of 25.3 in February 2009, but still below levels above 100 considered normal during a typical economic recovery. In addition, US Department of Commerce determined Americans’ real disposable personal income increased 3.9% ...
Difficulties in Formulating Macroeconomic Policy Policy makers try to influence the behaviour of broad economic aggregates in order to improve the performance of the economy. The main macroeconomic objectives of policy are: a high and relatively stable level of employment; a stable general price level; a growing level of real income (economic growth); balance of payments equilibrium, and certain distributional aims. This essay will go through what these difficulties are and examine how these difficulties affect the policy maker when they attempt to formulate macroeconomic policy. It is difficult to provide a single decisive factor for policy evaluation as a change in political and/or economic circumstances may result in declared objectives being changed or reversed. Economists can give advice on the feasibility and desirability of policies designed to attain the ultimate targets, however, the ultimate responsibility lies with the policy maker.
Euromonitor International, 2012, “Consumer buying behaviour in the recession: global online survey - executive briefing”, Euromonitor International, Accessed: 23/05/14
...also increases in December 2013 where as both the change in PCE and PDI decreases in December 2013. The increase in December 2013 of the CSI can be explained by the continued increase from October 2013-November 2013. Consumer confidence continued to increase then because consumers felt confident in a pattern of increase. CSI thus decreased in January 2014 in response to the decrease in PDI and PCE in December 2013. PDI and PCE both increased in January 2014.For all three indicators, the general trend is a positive increasing trend. CSI has an extra data point for February 2014 and thus all current data shows an increase from the previous data point. This points towards increased spending due to increasing disposable income which in turn will create an increase in consumer sentiment. Thus it seems that the consumer activity indicators point towards economic growth.
The Bureau of Labor Statistics uses Seasonal Adjustment to accommodate for the sharp increases and decreases due to seasonal employment and layoffs. By removing the fluctuations, the graphs are easier to analyze, “Seasonal adjustment eliminates the influence of these fluctuations and makes it easier for users to observe fundamental changes in the level of the series, particularly changes associated with general economic expansions and contractions” (Bureau of Labor Statistics). Typically, seasonal employment flows with the seasons, for example during the winter months, unemployment is higher because of industries like construction and agriculture are halted. On the contrary, at the beginning of the summer months, unemployment is lower because student enter the workforce as the return home from school.
We are now approaching the half of this year. There are scores of surprising predictions from experts regarding this year’s economic and business condition. According to the economists, the world economy is predicted to be more thrive than last year, the economic condition of the U.S. was also estimated to increase 3% and significant increase in the trade sector. This prediction may bring benefits for developing countries like Indonesia in the trade sec...