The United States is the leading economy across the globe and experienced several tribulations in the recent past following the 2008 global recession. Despite these recent challenges, there are expectations among policymakers and financial experts that the country will experience solid economic growth. Actually, financial analysts have stated that the U.S. economy will be characterized by increased consumer spending, increased investments by businesses, reduced rate of unemployment, and reduction in government cut. Some analysts have also stated that the country’s economy will strengthen in 2014 with an average of 2.7 percent or more. However, these predictions can only be understood through an analysis of the current macroeconomic situation in the United States.
One of the most important ways of dealing with the American macroeconomy is to measure the overall economic well being of the economic system. The most common way of doing this is by calculating the gross domestic product (GDP). According to Mankiw, the "gross domestic product is the market value of all final goods and services produced within a country in a given period of time" (330). Essentially, the GDP measures the overall economic productivity of a society. The American gross domestic product has only dipped significantly once in my lifetime, and that was in 1982, the year of my birth. Since then, the American GDP has clim...
This paper will be a discussion of the current economic condition of the United States and this writer’s opinion on how it can be changed. Unemployment is high and needs to be reduced to full employment. We will explore the inflation rate, GDP growth and other factors of our current economic situation.
It has been 5 years now, but the world economy is still hovering over with ill effects of global economic recession. Different economist define recession in a different way but one common definition which can be derived is that recession is long lasting and prime reason for slowdown to economic activity(GDP). In terms of measuring the effects of recession, the broadest indicator of economic activity is real gross domestic product(GDP). Our following section will discuss how the economic activities in US has actually decreased since the beginning of market turmoil.
According to the U.S. Department of Commerce, the Real GDP increases at a rate of 3.6 percent in the third quarter of 2013. Also, the Federal Reserve Economic Data (FRED) announces that the unemployment rate has reached its lowest state at 7 percent since 2009. As for the inflation rate, the U.S. government published the latest annual inflation rate, which is 1 percent. Compare these data to the 2008-2009 recessions, the GDP growth rate for 2008 is -2.7 percent and -5.4 percent for 2009. As for the unemployment rate for 2008-2009 recessions, the peak was at 10 percent. For inflation rate during the 2008-2009 recessions, the base is at -2.1 percent. In contrast with the previous recessions in 2001, the 2008-2009 recessions drop the private consumption, lowering the consumer confident. Because of this, the recovery period will take longer than the previous recessions....
An economic indicator is a statistic of the current status of the economy. This can predict how the economy may perform in the future. Investors and other private or government organizations use this information as a tool to make business decisions. By gathering historical data about the economy and comparing it to current trends, one can compile a snapshot of economic fluctuations. The direction of an indicator may vary according to changes in the economy. The indicator can be leading, lagging, or coincident. Leading indicators are changes before the economy has recognized the changed. Lagging indicators do not change until a few quarters after the economy has change. Coincident indicators move at the same time as the economy (The Library of Congress, 2005). Some of the common indicators are GDP, Unemployment Rate, Inflation Rate, Capacity utilization, Auto sales, and Personal income. As the explanation of these six indicators will be use to forecast the future of the economy, the trend of these indicators will also be used to evaluate the economy's historical and future outcome.
A monthly release from the Bureau of Labor Statistics (BLS), the PPI shows trends within wholesale markets, manufacturing industries, and commodity markets. All industries that produce physical goods that make up the economy of the United States. They are included, but not imports. Taking into consideration, the PPI measures the purchases of goods and services completed by urban households, the average changes over time in the sale prices received by domestic producers, and the sales at all production levels for producers in the United States. This includes sales of unfinished products used throughout the production and production chain. The PPI can serve as a principal indicator of definitive price changes at the consumer level, and of inflation if the trend in the PPI is higher. Low inflation is good for stimulating consumer spending, corporate profits and, ultimately, the stock market. The rise in inflation can be a sign of an overheated economy and potentially higher interest rates. On the other hand, the PPI can give analysts, business executives, and investors with information on price trends at various stages of the production process. This is useful for companies in making capital investment decisions, for analysts in tracking economic trends and for investors looking for clues about future inflation. Also, the PPI can offer analysts, business executives, and
The economy works in a bunch of strange ways. Changing all the time. This is because of leading and lagging indicators. Indicators can control the economy progresses or get worse. Leading indicators, defined as a change prior to economic adjustments and, as such, can be used to predict future trends. This would include stock market, inventory levels, and the housing market. Lagging Indicators reflect the economy’s historical performance and changed to these are only identifiable after and economic trend or pattern has already been established. The government has an interesting way of using these indicators to their advantage, helping the economy so it doesn’t grow too fast or grow too slowly. This helps the economy so we don’t fall so far that it will be hard to get back up. We did this once during the great depression when there was no money in the economy, businesses were shutting down which left the government to pay the businesses to keep it open. Which, of course, put us into a debt. Us, as american citizens are “asked” to pay that debt off through our consumer spending and paying taxes. Are we on our way towards this? I do not believe so. In this essay, I will show you the reasons I believe that the economy is getting better through 2 leading indicators and 1 lagging indicator.
Similarities within the economy of the United States expose the American economy as the “Land of the Free”, “Home of Brave”, and “The nation filled of opportunity”. American economics is not like any other
Since the birth of the United States over two-hundred forty years ago, the citizens of this country and of all civilization throughout the world, have seen this country grow to extraordinary heights in terms of production, the armed forces, population, and also, the economy. Likewise, the world has also seen the United States economy drop tremendously during times such as the Great Depression of the 1930s, and most recently during the housing market crash of 2007. The changes in politics that occur on a yearly basis have both created a positive and negative outlook of today’s economy. The most recent and important political change that will decide the growth or decline of the economy for years to come was the inauguration of the 45th President,