Present state of US economy from a business perspective
Even though the latest jobs reports were disappointing, other recent US economic indicators looks more encouraging. One of the major concerns to analysts is the increase in oil prices over last five months, which might significantly slow down economic growth. Even though the economy is improving slowly, 2012 will be the third consecutive third year of disappointingly slow growth, with a growth of 2% after inflation. With this slow growth, consumers are expected to spend less voluntarily, encouraged by lower gas prices and gradual decrease in food prices from the drought. Despite all these, business investment is not set to improve from its current low pace because managers and owners await clear indications that the Congress will ward off tax hikes and spending cuts at the end of the year. The housing sector is on the upturn even though smaller. The US trade deficit has risen above $600 billion in 2012, an increase of 11% in 2011. The retail sales in the US grew by 6% in 2012 as compared to 7.4% in 2011.this shows that there is decline in consumer spending.
How would you relate today’s US economic and business challenges to the chapter section on Today’s Business Workforce?
Today’s businesses require skilled and dynamic workforce that is able to adapt to the changing trends and technology. There is increasing level of unemployment in the US as result of lower growth rate of businesses and emergence of new technology that has made it possible to outsource some services. Due to the unfavorable economic conditions in the US, most business are outsourcing or manufacturing in developing countries to save cost. In order to save costs, some businesses employ people part-time which make them lack interest in their jobs. This compromises the productivity of such firms as employees do not give their best. The rising production cost in the US has driven most firms to consider offshoring to Asian countries which have cheap labor. Such strategies result into unemployment of the ever increasing US population.
Do you think the US’s private enterprise system as used today and historically is the best system for the future? Why or why not?
In my opinion, the US’s private system as used today and historically is the best system to be adopted in the future. I am for the system because even though it is capitalist, the government does its best to control monopolies and protect the rights of workers. This system also enables business to meet the needs of the public and encourage and promote competition for the well being of the society and businesses. The system allows business the required freedom to conduct their businesses with minimal interference from the government.
Reference:
Boone, L.E. & Kurtz, D.L. (2011). Contemporary business. NY: John Wiley & Sons
