Economic Indicators When predicting the future of the economy it is necessary to look at forecasts from several different economic indicators such as Real GDP, unemployment rates, the Consumer Price index, interest rates, Producer Price Index, and oil and fuel prices. It can be helpful to look at more than one forecast as there may be a variety of forecasts with different results or bias. Comparing two forecasts per indicator will give consumers a better idea of upcoming economic conditions. After evaluating such forecasts, it is important to analyze which forecast best suits the current circumstances to more accurately prediction of the economy. Unemployment Rate Although some degree of unemployment is inevitable in a complex economy, the amount of unemployment varies substantially over time and across countries. Unemployment rate forecasts matter to the financial market and consumers. Unexpected changes in the unemployment rate have a statistically significant effect on the economy. These unemployment rate changes affect consumer confidence because the public identifies the unemployment rate with the economy's health. To the extent that changes in the unemployment rate influence households' perceptions and expectations of economic conditions, they also affect spending, output, and employment. Sources, such as The University of Central Florida and The Livingston Survey have released forecasts of the US unemployment rate. The Livingston Survey released a 2006 forecast that forecasts sustained output growth through the end of 2007. Growth rate will increase to 2.8% in the first half of 2007, and they predict it will then increase to 3.1%. The Livingston Survey has also said that the unemployment rate is expected to rise f... ... middle of paper ... ...on March 1, 2007 from the Congressional Budget Office website: http://www.cbo.gov/showdoc.cfm?index=7731&sequence=0 The Livingston Survey. (2006, December 7). Retrieved on March 1, 2007 from the Philadelphia Federal Reserve Bank website: http://www.phil.frb.org/files/liv/livdec06.pdf The Livingston Survey (2006, December 7). Forecasters Lower Their Estimates for Growth and Unemployment. Federal Reserve Bank of Philadelphia. Retrieved on March 2, 2007 from http://www.phil.frb.org/files/liv/livdec06.pdf USA: 5-year forecast table. (2007, February 21) Economist ViewsWire. Retrieved March 3, 2007 from Economist Intelligence Unit Database U.S. Forecast (2007, February). Highlights of the 1Q 2007 Forecast. College of Business Administration – University of Central Florida. Retrieved on March 2, 2007 from http://www.bus.ucf.edu/hitec/UCF_US_ForecastFeb07Final.pdf
This paper aims to discuss the Short-Term and Long-Term Impacts of the Great Recession and
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.
Ejim, Esther, and Kaci Lane Hindman. "What Is the Relationship between GDP and Unemployment Rates?" WiseGEEK. Conjecture Corporation, 13 June 2017. Web. 04 July 2017.
During the course of this paper, we hope to give the reader a better understanding of the economic forces at play that influence this Nation's GDP, in therefore its economic health.
Every few years, countries experience an economic decline which is commonly referred to as a recession. In recent years the U.S. has been faced with overcoming the most devastating global economic hardships since the Great Depression. This period “a period of declining GDP, accompanied by lower real income and higher unemployment” has been referred to as the Great Recession (McConnell, 2012 p.G-30). This paper will cover the issues which led to the recession, discuss the strategies taken by the Government and Federal Reserve to alleviate the crisis, and look at the future outlook of the U.S. economy. By examining the nation’s economic struggles during this time period (2007-2009), it will conclude that the current macroeconomic situation deals with unemployment, which is a direct result of the recession.
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.
The United States’ economy has slowly been recovering since the Great Recession ended in 2009. The country’s gross domestic product has increased steadily since the end of the recession (1). The consumer price index has slowly increased as well (2). The civilian unemployment rate has decreased significantly from its peak of 10.0% in October of 2009 (3). It has not decreased smoothly; rather, there were many small spikes caused by several short increases in unemployment each year (3).
An economic management issue in the public sector is unemployment (or joblessness) occurs when individuals are without work and actively applying and looking for work. The unemployment rate is a measure of the prevalence of redundancy and it is calculated as a percentage by dividing the quantity of those unemployed by all individuals currently in the labor force. Throughout periods of recession, an economy usually encounters a relatively high unemployment rate. According to International Labor Organization report, “more than 197 million individuals globally are not in workforce or six percent of the individuals were without a job in 2012.” (Allegretto & Lynch, 2010) Persistently high rates of unemployment in Europe throughout the last two decades show that unemployment is, at least to a reasonable degree, not just business cycle anomaly. This reflects a proceeding waste of labor and of human capital in most European nations and the United States. It appears reasonable to inquire, if given levels of unemployment impact long-run productivity growth or the long-run level of productivity itself. While unemployment is an extreme issue in Europe, not in the U.S., the decrease in productivity growth has been stronger in the United States. “Between 1979 and 1997 the average rate of unemployment in the US was 6.7% and the average growth rate of labour productivity was 0.9%. In Europe the average rate of unemployment was 9.3% and the average growth rate of labor productivity was 2.2%.” (Allegretto & Lynch, 2010) The reason given for these facts is: high wages lead firms to substitute labor with capital. This can lead to increasing unemployment and productivity since the workers who are still utilized become more productive Therefore, it is ...
First, I will discuss the time period between 1973-1974. Because the unemployment and inflation rates are higher than normal, we can assume that the aggregate-demand curve is downward-sloping. When the aggregate-demand curve is downward-sloping, we know that the economy’s demand has slowed down. When the economy’s demand has slowed down, businesses have to choice but to raise prices and lay off workers in order to preserve profits. When employers throughout the country respond to their decrease in demand the same way, unemployment increases.
Today more than ever, there is a major and constant fear of an impending recession in our government’s economy. A recession is a downturn in the economy when output and employment are falling for at least a period of six months. (Krugman and Wells, 2006) This is due to a number of factors: people buying less, a decrease in factory production, growing unemployment, a slump in personal income, or an unhealthy stock market. (Harris, 2002) These factors including scarcity, choice, and opportunity cost are the reasons that an economy is considered in a recession and how something like this happens.
Bureau of Labor Statistics. This report reveals the unemployed rate in the US, except government, farm and non-profit workers. That covers some 80% of the US working force. A decrease in the unemployed rate, i.e. there are more people working, usually indicates the market is growing. As a result the American Dollar will grow stronger. If a trader speculated that beforehand, and opened buying positions prior to the announcement – the outcomes would be to his favour. Naturally, if the unemployed rate rises the Dollar will weaken. Either way, the NFP and the speculations beforehand will cause vibrations in different
Recessions cause social consequences. During the recessions, the unemployed suffers a lot. The authors say that many people lost their savings as the stock market crashed and thousands of banks failed. What they can depend on is only the meager relief distributed by the government. In addition, ¡°prolonged unemployment may also bring with it a number of social and person ills: anxiety, depression, a deterioration of physical and psychological health, drug abuse, and suicide¡±.
In a recap, the three policies introduced, the Unemployment Reformation Act of 2059, the Infinite Education Opportunities Program Act, and the Unity Tax, will be a vital part in restoring and surpassing expectations for decreasing the percentage of Americans unemployed by ten to fifteen percent within the next six to eight months. I believe that with these policies the chances of a recession will not occur for a long period of time. For that matter, a recession may not occur again depending on how successful the unemployment plans develop. Nevertheless, I predict that by the year 2109 the employment rate for Americans will reach eighty-three to eighty-five percent.
Inflation according to Pettinger (2014) links the increase in prices with unemployment because it discourages businesses to invest, creating the uncertainty and lowers the investment in turn there are lesser jobs created on the market. Recession is a temporary decline in the economic cycle leading to the reduction of industrial activity because of this it affects the business sector and consumer spending creating massive layback on the labor market thus workers are lay off from employment because of the losses. Business cycles are unpredictable when there is a contradiction in the economic perspective, businesses are dealt with reduced revenues leading to workers being lay
Unemployment issue can lead to a lot of impacts to the economic growth. Higher unemployment rate will lead to increase government borrowing. When people are without their job, they would paid less in the income tax. So, it will cause a drop in tax revenue because there are lesser people paying income tax and spending less. Due to the loss of earnings to the unemployed, the government need to spend more subsidy for them in housing benefits and income support.