Many people might want to say that the US economy is climbing out of the recession and becoming more stable. Yes,the economy is changing, the unemployment rate is getting better, the GDP is showing a positive increase and the inflation rated is currently at 1.7% which are all indicators that the economy is getting better. Yet, the Fed’s need to monitor the economy because there can be a potential bounce back into recession with the problems in the Middle East, Russia, and elsewhere in the world which can greatly affect the economy here in the U.S. if the U.S gets deeply involved.
Currently the macroeconomic situation in the United States is still in the mid crisis, fighting very hard to bounce back to its norm. The economy is still facing
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This indicates that the unemployment rate is getting better so is the stock market, Wall Street stock also trend up (Cox, J. 2014). The Bureau of Labor Statistics also reports in the second quarter that “unemployment rate declined by 329,000 to 9.3 million, the number of unemployed individuals fell by 1.3 % and 1.9 million over the year respectively.” (Bureau of Labor Statistics, 2014)
As the employment rate is improving, so would be the GDP for the U.S. A year ago, the GDP was 16661.0 billion, a month ago, it was 17311.3 billion and this week the GDP reported 17328.2 billion, which indicates that the economy is improving. There is a total increase in the Gross Domestic Product of 667.2 billion this year (Bostjancic, K. (2104). The GDP is being closely monitored by the Federal Reserve Bank (Fed) to determine if the economy is growing too quickly or too slowly. If it is determined that the economy is growing too quickly, to avoid inflation the Fed will increase interest rates. Likewise, if it is growing too slowly then interest rates will decrease to increase consumers spending and expand company investment.
The expansionary fiscal policy is intended to stimulate the economy during a recession or if there is anticipation that a recession is approaching. The expansionary fiscal policy encourages government spending and decreases taxes. Through government spending and decreasing taxes this will simulate aggregate
A nation’s economy plays a vital role in how a nation operates. The United States economy faces a large variety of problems in this paper; we will focus on 4 major economic problems, unemployment, inequality, federal debt, and the financial/credit market. All four issues are interconnected in some way with deep social and economic implications. These issues were emphasized during the Great Recession that hit the U.S. economy in 2007.In the following paper, we will look at each of the four topics individually as well as look at how each plays a significant role in one another’s overall impact on the U.S. economy as well as individuals in the United States. The United States plays a crucial role in the world economy, meaning that every issue and difficulty faced the United States economy has implications far outside the U.S., understanding how these issues relate to one another sheds insight into just how connected every area of the economy actually is.
After the economy hit a slowdown in the first quarter of 2015, the US economy has likely sped up in the second quarter. The labor and real estate markets are staying steadily on their recovery paths and should let the Federal Reserve,
What is the "current macroeconomic situation" in the U.S. (e.g. is the U.S. economy currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and monetary policies would be appropriate at this time?
The health of the current U.S. economy appears to be growing gradually. The second quarter real GDP growth was 3.7% and the unemployment rate declined to 5.3%. The U.S Federal Reserve (Fed) is expected to raise interest rates in the near future when it sees clear signs of strong economic growth and improvements in the job market.
QE3 began in September of 2012 with a gross domestic product increasing by 4.5%, which is an impressive gain over the previous years of very little growth, GDP currently, has had a relatively steady increase over each quarter amounting to 3.9% for the most recent data. However, while GDP is of serious concern, inflation and unemployment rates have not been so easily persuaded. According the Bureau of Labor Statistics (1), in September 2013 unemployment was in a downswing but still resided at 7.2%, much higher than the Feds target rate of 5%. Currently unemployment is at 5.8% which is within the realm of the Fed’s goal. Inflation has
To begin, The Federal Reserve System opted to raise interest rates that were placed near zero years ago in order to aid the economy’s growth and prevent inflation from exceeding the target number. Several factors including: the five percent drop in the unemployment rate, and the increase in wages, and the outlook on future inflation contributed to the Federal Reserve’s decision take this action. However, the increase in interest rates in December has generated mixed results, and it appeared the Federal Reserve would announce the interest rates were going to increase again. Instead, Janet Yellen, the chairman of the Federal Reserve, announced that there were better days ahead for the economy, and a slow and careful approach to future increases in the interest rate would serve the economy best, ensuring the growth is maintained. Although the interest rates remained the same early in 2016, they are expected to increase during the June meeting of the Federal Reserve. but cited the economy needed low interest rates in order for the economy to maintain growth. I find it interesting that Yellen continues to worry about inflation growing in the coming years, although the interest rate increase should keep inflation in check through its effect of the economic markets. Yellen sites that she would like the inflation to become and stay at 2 percent each year. However, the current inflation rate is .9 percent, so the the economy is a long way from achieving its target inflation rate
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
Americans have been bombarded by new worries in recent days with the war in Libya, unrest in much of the Middle East, and the seemingly endless series of catastrophes in Japan as reported by a recent Gallup poll measuring economic confidence. Added to that, there is a weak job market, increasing fuel prices, and fierce budget battles in Congress, obviously, it is clear the U.S. economy still faces
First of all, expansionary fiscal policy is passed to expand the money supply of an economy to encourage economic prosperity, growth, and combat inflation. Inflation is described as the overall increase of prices in an economy or country. There are several ways an
The latest FOMC statement indicates that the economy is expanding at a constant pace, with increases in employment alongside GDP growth. The US economy expanded more than expected in the third quarter of 2014, with real GDP increased 3.9 percent, surpassing the forecasted 3.5 percent, despite slowing down from a 4.6 percent increase in the previous quarter. The increase in real GDP was contributed by higher than expected increases in consumption, investment, government spending, and net exports ("News Release: Gross Domestic Product"). Unemployment has continued to decrease for the third consecutive month in October, with a drop from 5.9 percent to 5.8 percent, the lowest in the past 6 years since its 10 percent peak in 2009 ("Employment Situation Summary"). However, the rate is still below 4.7 percent before the recession. According to the National association for Business Economics, Real GDP is forecasted to expand further, and the unemployment rate is expected to fall to 5.4 percent by the end of 2015 ("NABE - NABE Outlook December
The economic meaning of a recession is that the gross Domestic Product (GDP) has declined for two or more consecutive quarters. Unemployment rises, housing falls, stocks fall and the economy is in trouble. Whenever the government sees that the economy is entering a recession it is important for it to act. The U.S acted in two ways during the Great recession of 2008 through fiscal and monetary policies. Renaud Fillieule identifies that “ Monetary and credit expansions have been the main tools used by the U.S. government and central bank to try and recover economically from the Great Recession of 2008” (Fillieule r, Pg. 99 2016). These Keynesian policies are debatable among economist, none the less they were implemented and put the U.S on the road to recovery.
The U.S. economy, as measured by real GDP growth (i.e., GDP adjusted for inflation) began to recover in mid-2009. However, the pace of growth over the next 3½ years was slow and uneven. From the second half of 2009 and through 2010 real GDP increased at an annualized rate of 2.5%. Compared
The current rate of GDP growth, according to the Bureau of Economic Analysis, is 2.7% (for Q3), and it was 1.3% in Q2 of this year. This rate reflects relatively slow growth, with challenges remaining in the domestic market and with sluggishness in Europe suppressing exports to that region. The rate of GDP growth is predicted to slow to a decline of 0.5% between Q4 2012 and Q4 2013, the US re-entering recession, according to the Congressional Budget Office's projections. These projections are based on the provisions of the Budget Control Act being enacted, though any observers are doubtful that this will occur.
The unemployment rate in the United States has improved dramatically over the last two years, from a high of 8.3% in July 2012, to a low of 6.6% in January 2014. In October of 2012, the civilian labor force increased from 578,000 to 155.6 million, labor force participation increased up to 63.8%, and total employment overall rose by 410,000! Since then, the unemployment rate has been falling at a stable rate due to a political push from Washington DC and new employment initiatives. The inflation rate over the last 2 years has been relatively stably, with a few major increases and decreases in 2012 and 2013. It reached a high of 2.3% in June of 2012, and reached a low of 1.0% at the end of 2013. The federal interest rate has remained at a constant .25% over the past few years.
The global economy was relatively doing fine more than five years ago before it was hit by economic downturn or recession. During this period, the American economy was at its peak, particularly in the fourth quarter of 2007. However, this was followed by a mild recession at the beginning of 2008, which eventually turned into a severe credit crisis across the world approximately one year later. While only a few countries escaped the economic recession, virtually no country could avoid the severe bear markets in stock (Norris, 2012). Some countries like the United States experienced changes in gross domestic product and stock markets. Since it has the best record of the main developed countries, the United States was severely