The Employment Cost Index rose 1.1 percent from April to June and was the biggest quarterly change since the second quarter of 1991 when compensation increased 1.2 percent. Rises in employment costs, coupled with record low unemployment may drive up consumer prices. The industrial sector of the country is gradually slowing with durable goods rising .3% in June to $196.9 billion, a smaller-than-expected increase. During the previous June of 1998, durable goods orders was 182 billion. Unfilled orders fell .8%, marking a third-consecutive month of decline.
In early September, the European Central Bank lowered interest rates for the sixth time in less than a year, in hopes of initiating a rise in the value of the Euro. Despite these efforts the value of the Euro continued to falter. Then in late September central banks from many powerful economic nations collaborated in a major invention effort. The banks spent billions buying Euros to increase their demand while simultaneously selling dollars and yen. This effort seemed to have work as the Euro finally stabilized.
The above diagram shows the GDP growth rate of United States of America during the recession. From 2008 to 2009, the GDP growth rate of USA fell from approximately +3 to about -7. After President Obama created the Stimulus plan in 2009, the GDP growth rate increased rapidly from -7 to almost +5. This shows that the policy applied by US government works very well to help America recover from Great Recession. Besides, the US government did cut taxes.
The IT bubble burst in 2000 caused a dramatic fall in IFDI which can be illustrated in Figure 1. The downfall resulted in the UK attracting only $16.8 billion in 2003. The data shows that the FDI inflows boosted in the period of 2004-2007, and that Mergers and Acquisitions that the Multinational Corporations used to enter the UK, as well as the reduced interest rate, can explain this. Due to the sudden collapse of the world’s economy in 2008 M&A became an unfavourable method of FDI and in just one year IFDI into UK shrank by 50%. The trend continued up to 2011, as the FDI pattern moved towards investments into third world countries and developing nations.
So far the prior four times the Federal Reserve has raised rates not much has happened. I am predicting that if the current rate hike does not effect the market, Federal Reserve Chairman Alan Greenspan will raise rates again in March and May to slow our prosperous economy. The reason why a rate hike will slow down the economy is by raising the overnight rate to 5.75, the highest since 1995, it has made borrowing less attractive. In turn, corporation will have less money to invest then productivity will go down, hence supply will go down and demand will soon follow. Right now though productivity numbers released in January showed that it is on the rise, which has keep inflation in check.
This sounds like a report on today's economy but it is not. The current market resembles that of 1987 greatly, so is the market heading for a collapse? No, not for the same reasons as the 1987 market. In 1987 interest rates rose, the return on a 30 year government bond rose from 7% to more than 10% between January and October. Historically a rise in interest rates drives the stock prices down; in 87 the market ignored the rise in interest rates and kept growing setting the stage for a crash.
As for our manufacturing industry this has reported its worst fall in output in more than 10 years, increasing fears over the health of the UK economy. Also Factory production it is reported fell by 4% in the year 2002, This is the largest annual slump since 1991, this is according to figures from the Office for National Statistics. Britain's manufacturing industry is going through its worst recession since the early 1990s, however high consumer spending has so far protected the wider economy. 2004 has seen a rise in economic growth both in the UK and worldwide. Britain has had what economists call full employment for quite some time the problem for the future is that this could soon change and we could end up like germany with 10.5 % of the population out of work.
These factors include: the sudden shift in tax rates, the diminishing "global wealth" of America, and the inability of the government under Regan to satisfy a "happy medium" for economic growth. All of these factors support Phillips' theme and prove his argument of an up and down cycle of economic stability. From 1921 to 1925 the top one percent of the population's tax rate was gradually decreased from the marginally high rate of seventy-three percent all the way to just twenty-five percent. Over four years this elite group of Americans received a forty-eight percent reduction in taxes. This decrease opened the door for the super-rich Americans to capitalize and increase their current wealth.
Amazon had a lower ROE in year 2013 compared to year 2010, which illustrated that every dollar shareholders invested generated lower net income. Morever, in 2012, both ROA and ROE were negative. The reason why Amazon’s profit decreased over recent four years is because that its cost of goods as a percentage of revenue increased. Amazon expanded its digital market to Asia and Europe, which led to a increasing in shipping and packaging cost. Comparing Amazon wi... ... middle of paper ... ...old these elements constant, the estimate Amazon’s stock price should be $286.41 to $387.2.
It was the non-revolving debt that is used in buying homes and autos, which fell at -$4.9 billion compared to an increase of $0.2 billion in the prior period. During Tuesday we received some sentiment surveys which was slightly lower than the prior period results, yet the markets improved nonetheless. On Wednesday the market received word that October wholesale inventories increased slightly by 0.3% after falling 0.8% in the prior month. Economists had expected inventories to decline by 0.5%. This news was seen as positive as market participants interpreted the increase as companies preparing for an expansion, regardless of whether the expansion is robust or mild.