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Current State of Us Economy

In: Business and Management

Submitted By yferd100
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With the recent government shutdown and the fiscal cliff debate over, many Americans are stepping back and asking “what is the current state of the economy?” Although the nation has been experiencing growth and a decrease in unemployment for the past three years, the national annual deficit of $1.1 trillion and the recent fiscal cliff debate along with the government shutdown reflect the nation’s struggle with furthering our economic growth and stability.
According to the Bureau of Economic Analysis and the Bureau of Labor Statistics, GDP increased 1.1% in the first quarter of 2013 and 2.5% in the second quarter mainly due to an increase in business investments and goods exports and imports. What we can expect in the next few years is a slow and steady increase in the growth rate. However, many seem skeptical if the increase will be notable to say the least.
Like GDP, unemployment has been on a steady decline for the past three years. The unemployment rate dropped from 7.8% in December 2012 to 7.3% in August 2013. This reports that there is an increase in job creations. However, what is more notable is that there is a higher increase in part-time jobs as opposed to full-time jobs, which leaves a bad taste for many because there is no certainty and sense of security. Household debt continues to decline in most categories like credit card debt. Yet consumers continue to remain cautious with a slowdown in consumer spending and spending for goods and services. If this trend continues, we may see that fewer companies will want to hire personnel due to a decrease in demand and production which would lead to deflation. If these statics stand correct, the odds of cost push deflation will become a possible threat.
The current inflation rate, recorded in August of 2013 is at 1.5%. Consumer prices increasing 1.8% in the past year, the possibility of inflation remains…...

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