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. Current Macroeconomic Situation: According to Payne (2014), the U.S. economic growth will strengthen in this year with an average of 2.7 percent because of various factors including the strengthening of consumer and business confidence. The other factor that will contribute to the strengthening of the country’s economic growth is Europe’s emergence from its long slumber, a trend that will brighten the prospects of foreign sales. However, this economic growth will largely be limited by ongoing government deficit reduction. As compared to the first half of 2013, economic conditions are already better since growth increased with an average of 3.7 percent in the second half of 2013. Consequently, expectations of increased economic growth in the United States are rising as people believe that this will be the best year since the tribulations of 2008 global recession. Generally, America’s GDP growth will become stronger in 2014 averaging at least 2.7 percent becaus... ... middle of paper ... ... the same. The Federal Open Market Committee should base its employment policy on outlook for the level of employment or unemployment through substantial improvement in labor market outlook. 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.
This paper aims to discuss the Short-Term and Long-Term Impacts of the Great Recession and
Many companies today, must operate in a challenging and volatile economic environment. The United States got off to a weaker-than-predicted start in 2015: with unemployment rates continuing to fall, and currently stand around 5.4%. Consumer spending, which accounts for approximately two thirds of all economic activity, has been modest so far in 2015 (Schwartz, New York Times).
2009, the unemployment rate decreased gradually. This statistic shows that the policies of United States are very successful.
In 2009, the United States economy began to recover from the Great Recession. To aid in the recovery, the newly elected president Barak Obama created the American Recovery and Reinvestment Act better known as the second of two “Stimulus Packages.” Pa...
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.
In 2001, after the longest period of economic expansion the country has witnessed historically, the United States of America entered into its tenth recession since the end of World War II. A recession transpires when at least two quarters of a year are plagued by a sharp downturn of the country’s gross domestic product or GDP. More specifically, when a recession occurs, unemployment increases resulting in less consumer spending which is associated with poor business performances. Studies by the National Bureau of Economic Research (NBER) concluded that during March of that year, a pinnacle in business occurrences declared the end of the expansion and the arrival of an inevitable and damaging though short recession. In a state of urgency, the president at the time, George Bush, encouraged Congress to ratify a stimulus package plan which would seek to improve the standing of the economy. The NBER theorized that the infamous act of terrorism which took place on September 11th placed an even greater strain on the already damaged financial system because it wreaked havoc on many markets and businesses such as the airline industry. Many times, a recession occurs due to economic disasters that are enough of an impact on society to disrupt expenditures of large-scale businesses and individual citizen households. Consequently, aggregate demand decreases along with employment. Factors such as international conflicts, technological fluctuations and the endeavors of monetary legislators all contribute to the overall American economic status.
... for the economy. Concerning the economy of the United States it is still alarming. Neal Asbury, writer from Money News stated that US can recover their economy by reducing their taxes and regulations to grow small businesses and then rise the employment rat. They need also to ensure banks are healthy and they can provide money to entrepreneurs and they also need to expand the global trade by lowering the barriers against the manufacturers. ( Asbury 2013)
The rate of unemployment is an important measurement of the conditions in the total labor market. The rate of unemployment is the percentage of people in the labor force who are unemployed. It is equal to the number of people unemployed divided by the number of people in the labor force multiplied by 100. The department of Labor indicates five reasons why people may experience unemployment. These reasons included: new entrants, reentrants, job leavers, dismissed, on layoff. As the world changes, new products are introduced and new technologies are developed, some unemployment is inevitable. However, there can be a positive side to job searching because an individual can possibly find a better job.
The GDP is the total aggregate income of the United States. It is comprised of consumption, investment, government spending, and net exports. The GDP in the fourth quarter of 2000 grew at a 1.1% annual rate, the lowest since a 0.8% increase in the second quarter of 1995. The below par performance in GDP is due to those factors that comprise the GDP. The most important of which is consumption. Consumption in the United States has been less than expected mainly due to low consumer confidence. Consumer confidence has hit a 10 year low with an index of 106.8 as reported by Alan Greenspan. In the past 2 months the index number has plummeted nearly 22 points, the biggest decrease since the 1990-1991 recession. The reason for this recent drop in consumer confidence is due to several key factors. One factor is the poor performance of the stock market. The Dow Jones is down from its peak that was hit last year, but has now rebounded slightly. The Nasdaq took a dive with the decrease in the prices of tech stocks. The Nasdaq has fallen nearly 56% from its peak in March of 2000. The Wilshire 5000, which is a broader market, is also down by about 22%. Also a factor in dropping consumer confidence is the fear of more layoffs by major employers. The media has paid a lot of attention to large layoffs of companies, yet the labor markets still remain fairly tight. The natural rate of unemployment in the US is approximately 5%, which is higher than the actual rate...
Job gains in the USA are expected to continue at a moderate pace. This, however, will have a negative effect on corporate earnings. However, increase in household cash flow due to low-interest rates helped consumers to reduce their mortgage payments and consumer debts. This reduces the fear of a recession in next 12 months.
...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.
It seems that it is apparent that the current macroeconomics situation in US is bit difficult in numerous ways. The situation relating to employment, inflation, monetary and fiscal policies has been detrimental to US citizens who have undergone through an trembling economy for a lot of years. When there is enlargement in monetary activity, then the affluence will be experienced by a larger number of fiscal entities, in addition to industries, firms, workers, owners of capital as well as others. When there is a fall in fiscal activity, then the segment of companies’ encounters with decrease in production and further sectors of the financial system with the decrease in consumption. Accordingly due to reduced production, the companies lay off certain employees or condensed their hours in addition to their wages. These pessimistic trends have an effect on the decline of standard of living as well as excellence of life of inhabitants and augment the deficiency rate, which positively represent the most complicated difficulty for each nation. Consequently, economists attempt to determine the causes of these affairs (stages) of trade cycles and formulate suggestions concerning what could be done by way of suitable economic policies to tone down such depressing phenomena of depression. Recession ought not to be observed as incident from which there is no way out, but as a very severe indicator that point out that the financial system is unhealthy and we ought to take dynamic measures to its quicker recuperation.
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.
After a long recovery from lingering recession, the World Bank indicated the global economic growth rate is forecast to accelerate from 2.4 percent to 3.2 percent in 2014from the U.S., China and other major developed countries. (U.S. News & World Report, 2014) Hence, many private analysts forecast consumer demand is increasing due to better off financially spending more for services and products. (Los Angeles Times, 2014)
Recent data suggest that the U.S. economy is on stable ground, although performance is uneven. According to an advance estimate, GDP increased at a seasonally adjusted annualized rate of 1.5% in Q3. The result, which was well below the 3.9% expansion tallied in Q2, reflected weak fixed investment and exports, although private consumption, the motor of the economy, grew at a healthy pace. The October jobs report grabbed headlines, with payrolls surging, unemployment falling to 5.0% and other measures pointing to solid labor market conditions. Consumer spending should