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State of US Economy There are three states of the economy we looked at in the class: Gross Domestic Product(GDP), inflation and unemployment. The economic data provided in this document is taken from the https://fred.stlouisfed.org/series/UNRATENSA. I also cited several resources mentioned at the “Works Cited” page. In this assignment, I will look at the rate of inflation, the Phillips Curve, which is the rate of relationships between unemployment in US and its inflation, unemployment rate for woman, unemployment rate for men and also at the real GDP per capita. 2013-08-14 2014-12-27 2016-05-10 2017-09-22 2019-02-04 2020-06- -0. -0. -0. -0.
Inflation
The figure above shows us the inflation rate using the Consumer Price Index from 2014 to 2019. The inflation rate in 2019 heads up from the beginning of January, and that is probably because inflation is typically low as it gets closer to US Christmas holidays and New Year. The inflation rate at the end of 2014 has dropped to being negative 0.57. To calculate CPI changes between 2014 January and 2019 February we have to: 0.42(for the year of 2019)-0.37(2019)/0.37(2019)*100= 13.515.
3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7. -0. -0. -0. -0.
The Phillips Curve
The figure above shows us the Phillips Curve rate from 2014 to 2019. The Phillips Curve is a pattern that shows the relationship between inflation and unemployment. In this figure we can see that the relationship is flat, meaning there is no relationship between inflation and unemployment since 2014. And because it looks flat and there is no relationships between them, it might make us think that even if the unemployment goes down as we will see in the next two figures, it won’t lead to much higher inflation. And that is true. For the next two years economists predict a stable inflation rate, without any substantial increases. It will be discussed in depth at the last page of this assignment.
The unemployment rate for men in January 4 was 7.5%. As of January 2019 it was 4.7%. It dropped down to 3%. However, the unemployment rate for women is lower than for men for January 2019 on 0.6%. So we see a falling trend of unemployment in United States for both genders. 0 2 4 6 8 10 12 0 2 4 6 8 10 12
Real GDP per capita
The figure above shows US Real gross domestic product per capita from 2014 to 2018. It shows quarterly and seasonally adjusted annual rate in 2012 dollars. The graph shows a correlation between income per person on the x-axis and life expectancy on the y-axis. The GDP has been progressively going up since 2014. Since 2014 Real GDP Per Capita increased in 7.26% ((
- 52296/52296)*100). In a conclusion, overall the economy of United States is looking good. However, it is always hard to predict for the future since economies of every countries become more globalized and politicized. Our economy becomes more dependent on trades, the growth rate of the population, technological progress and other factors or indicators of economic progress than it
was before. The economy of the US for the next three years is looking promising. Inflation expectations are of great importance for the development of inflation, and it is important that economics focus on real rather than nominal wages. Analyzing the level of inflation in the country, we must not forget that it is closely related to the level of unemployment, productivity and wages. And let’s not jump into conclusions about the unemployment rate. The unemployment rate is the ratio of the total number of unemployed to the economically active population, but it does not tell anything about people who stopped looking for work. This group is simply not counted in the group of unemployed. Therefore, when the unemployment rate declines, it happens for one of two reasons (or a combination of the two reasons). More people found work, or more people give up their job search. When adult Americans leave the labor market, it indicates a worsening of social and economic situation. Nevertheless, the real GDP per capita is showing excellent results and increased in 7% just in four years. Let’s turn to reliable sources and see what they say on the behalf of future progression of the United States. The Focus Economics(https://www.focus-economics.com/countries/united-states) states that US corporate debt (that reached 19.5 trillion dollars according to cnbc.com), elevated fiscal deficit, weaker global growth and trade tensions with China that can put US economical prospect in jeopardy. Nevertheless, so far as we look at today’s statistics, Focus Economics predicts that US GDP will increase in 2.4% in 2019 compare to 2018, and in 1.7% in 2020. Alejandro Chafuen however, predicts less optimistic results in US economy for the future. In Forbes, he states that “Decreased consumer optimism, uncertainties about the future of the U.S. political and economic scene, and low rates of growth in the economies of our trading partners will make it almost impossible to continue the current positive upward trend in U.S. GDP growth”. And he also highly suggests not to rely on foreign trades and policies. He mentions that in 2019 the real
https://www.cnbc.com/2019/03/12/global-debt-up-50-percent-since-the-financial-crisis-sp- says.html https://www.forbes.com/sites/alejandrochafuen/2019/01/03/the-u-s-economy-in-2019- challenges-and-lower-expectations/#4ed586083d http://fortune.com/2018/11/21/us-economy-slow-2019-recession-2020-economist-forecast/
