Us Economy Enters Full Employment Territory Essay

The unemployment rate has dramatically increased over the last several months. This increase has created many complications for the American people. Although the United States economy has created over 7 million jobs, there is still a long way to go until the economy is back on track.

The interest rates are expected to reach 7.0% by June, the most severally effected by these constant raises are shareholders. Because of these immediate effects market economists are largely against the interest rate hikes. Their position is that the average inflation rate over the past three years has been at around 2% close to the markets expected inflation rate of 1.9%. The economy is on a sixteen year run, continually moving forward. The historical data is there however; the consumer price index was at 1.6% over the past twelve months and the March year over year rate was at 3.7%

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

The discussion of whether the Federal Reserve should raise the federal funds rate is a highly contentious one. Members of the Federal Reserve (“Fed”) and academic economists disagree about what constitutes appropriate future macroeconomic policy for the Unites States. In the past, the Fed had been able to raise rates when the unemployment rate was under 5% and inflation was at a target of 2%. Enigmatically, since the Great Recession and despite a strengthening economy, year-over-year total inflation since 2008 has averaged only 1.4%—as measured by the Personal Consumption Expenditures Price Index (“PCE”). Today, PCE inflation is at 1-1.5% and has continuously undershot the Fed’s inflation target of 2% three years in a row. (Evan 2015) In the six years since the bottom of the Great Recession the U.S. economy has made great strides in lowering the published unemployment rate from about 10% back down to about 5.5%. In light of this data, certain individuals believe that the Federal Reserve should move to increase the federal funds rate in 2015 because unemployment is near 5% and inflation should bounce back on its own (Derby 2015). However, this recommendation is misguided.

The news mediums, television, radio, print, or social media give information 24-hours a day regarding the economy. Individuals are not so sure about the reports issued on almost an hourly basis that are stating the economy of United States is improving. Many Americans are still without jobs, and do not believe their income can continue to support their families. The cost of purchasing a home is going up in many areas across the country, which is good for the market, but can be bad for the first time homebuyer. Unemployment, expectations, consumer income, interest rates are economic factors that influence individuals behavior and the United States fiscal policy.

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’s economy is a mixed economy, where free-market and command economies are combined. This system allows both the people to further their own personal self interests, but to be limited by the government in specific needed areas. America’s economy gives employees, like myself, opportunities in which we can pursue our own self interests and despite the government regulation in some of the economic choices we have, much like the health care market, its presence is to help better our well being and freedom.

The US economy is still the largest and the most important in the world which represent about 20% of the total global output and is ranked as 6th highest per capita GDP. The US economy features a highly-developed and technologically-advanced services sector, which accounts for about 80% of its outputs. Large American Corporations also play a role on the global stage with a huge amount of their companies are located all around the world. The US is also the 2nd largest manufacturing in the world and also has an important manufacturing base and is the main hub in producing high-value products. They have access to almost any natural resource and is the world’s largest agricultural exporting country with sophisticated

The willingness of the FOMC to contemplate an increase in the federal funds target despite mediocre economic data would indicate that the bar has been set fairly low. Prior to last week’s policy meeting, there were 3 potential scenarios for the Fed. Firstly, monthly non-farm payroll gains in October and November in excess of +200K would guarantee a rate hike at the December policy meeting. Secondly, monthly job gains over the aforementioned period of +150K would probably have deferred the lift-off point until March 2016. Finally, further slowing of non-farm payroll growth to +100K per month in October and November, along with other data corroborating weaker expansion, would have pushed tightening deep into 2016. The arrival of a lower tightening bar may be due to the influence and gravitas of Fed Vice Chairman Fischer who seems to be the keenest FOMC member to raise the federal funds target in 2015. Markets are, however, reluctant to completely embrace a December rate hike, because the Fed has previously backed away from policy proclamations. Thus, the credibility of the FOMC’s policy statements is now being constantly put under the surgeon’s knife. While it is abundantly clear that December is the preferred lift-off point for the federal funds rate, there are potential circumstances that could, once

Economy is an important part of any country, as it determines the country's wealth and power. The United States has an economy which is always changing. However, changes to the economy don’t always benefit the people. The reason for this affecting the people would be tax increase. Some people believe that increased tax rates will help the economy by bringing in revenue needed for it to thrive,while other believe that it wouldn’t motivate people to do things like invest. The economy, for many reasons such as the one listed, is important because it determines various factors such as a country’s military, the production of goods and services, and things like trade as well.

He expounded, “when the ratio is high, there is lots of supply and that acts as a natural cap on wage increases. When the ratio is low, it means the demand is catching up with supply. That suggests that price increases in the form of wage gains could be in the offing.” He illustrates the ratios through a chart, which reveals Jolts data, that “the ratio is closing in on 1 to 1.” Further, he explains his theory on “why there are few signs of pay increases so far.” He clarifies, “Employers are both wary and a little bit spoiled. They are wary because they don’t know how long low-interest rates will hold down the cost of capital; many businesses have been prudently running lean, keeping expenses and overhead in check. It isn’t a surprise that we still see lingering signs of post-crisis stress.” He continues, “the low ratio of job seekers to openings suggests that if employers want to hire – and keep their existing employees – they might have to increase wages sooner rather than

Today, September 21, the Federal Open Market Committee (FOMC) had an announcement released at 2:00 p.m. in which it was declared that the FOMC will keep their policies intact. I was unable to follow the announcement at the time of release, although I was informed of the decision a little before 5:00pm. I immediately checked federalreserve.gov when given the opportunity and further learned the reasoning behind the FOMC’s decision. The FOMC felt the economy is still stagnant and not growing at the rate they would like. Due to this, they kept their policies intact hoping the economy will right itself.

On September 18, 2013 the Federal Reserve reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In addition, the committee agreed to continue its monthly $85 billion purchase of Treasury and mortgage-backed securities as long as the unemployment rate remains above 6.5 percent. Inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal and longer-term inflation expectations continue to be well anchored .

Greetings my fellow committee members. We need to support our nation’s people in this time of need. In the year 1934 the U.S. reported that there were 21.30% of people without a job. This means that of the 39+ million people in the U.S. 8,286,243 people are living without an income. With no jobs these fellow Americans have no way of supporting themselves. Our proposal lends a helping hand to every family that has no income. We currently do not have any system in place for people with no jobs. This means that even if they have no money coming in they are still charged for life.

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.