Inflation And Unemployment Essay

Inflation and unemployment go hand to hand in the world’s economy. When the unemployment rate starts going up inflation goes down and vice versa. Unemployed people are people that are looking for a job but can’t find one. Inflation in the other hand is the rise of prices of products and services. Inflation causes workers to ask for higher wages to be able to afford their expenses. In some cases, when the economy is in a recession employers can’t afford increasing wages or paying workers, so they decide to lay them off. When a person is unemployed they take one of the following options: work for less, change of profession, wait till job opportunity on their job line opens, or not work at all and live of unemployment. At this point the business

“The January employment report provides yet one more piece of evidence that the chance of recession this year is truly remote,” said Bernard Baumohl, chief global economist for the Economic Outlook Group in Princeton, N.J. “Economic activity should accelerate this year as rising employment, income, home values and confidence drive more spending,” and he was right. “The financial markets are leery,” said Michael Hanson, a senior economist at Bank of America Merrill Lynch, “but the labor market still looks like it’s continuing to grow.” The new figures suggested that the economy was holding up even with a slowdown in China, growing risks in emerging markets and uproar in the stock market. The slowdown in Chinas production gives the USA the chance to compete with products, quality, and pricing. The decrease in unemployment rate has the Federal Reserve thinking if they should increase the benchmark interest rate, in other words inflate the cost of living or not, according to the NY Times article, “Slower Growth in Jobs Report May Give Fed Pause on Interest Rates.” The economy is getting better but is not yet at its peak or strong enough for an inflation to take place but if the economy keeps going up in the next year or two expect it to happen. Most of our countries unemployment rate decrease is due to all the workers retiring which helps companies promote workers and have more entry positons for new employees. Also the raises in salaries and hourly rates help discouraged workers be more attracted to go back into the work