The measure of growth of goods and services in a country is measured by what is universally referred as Gross Domestic Product. The rise and fall of the GDP are mostly dependent on the consumer spending habits. The higher amount a consumer spends means countries GDP is high and economy is performing positively and also the income of the citizens is good. If the consumer’s spending habits are low the country’s GDP mostly may not be performing well. In a country like the United States of America, the GDP grew at 3.6% seasonally annual rate last year which was a great improvement from the 3.1% which the economists had predicted .This was the highest and best indicator of a performing economy since the first quarter of 2012.The United States America government credited this upward move to mostly by companies stockpiling list. The net increase figure was entirely dependent on the inventory gain. Economists believe that the inventory gains are highly volatile and could sap up growth in the fourth quarter as businesses cut back. The United States economy had some momentum when heading to the government shutdown and is widely believed that it will continue to expand in days to come. With less fiscal drag, a good consumer spending, a rise in the business investment the increase in 2014 is predicted to be around 2.5% which is much higher number than last years which was 1.7%.
South Korean economy advanced a seasonally adjusted 0.9% which was a small figure compared to a 1.1% which was in the previous two quarters. The countries economy is mostly fuelled by exports, low interest rates, and an expansionary fiscal policy which have been the factors propelling South Koreas GDP from 2010 onwards. The countries economy was predicted to grow at a rate of 3.7% in 2014.South Korea is one of the best countries in the world that offer the best environment in terms of doing business. The GDP has also been propelled by a pact signed by the South Korean government and the European Union on free trade between them. This pact makes 98.7% of import duties to be removed making the cost of doing business easier and friendly (Williams,2013).
In the United States, the unemployment rate was at 6.6% percent as at January 2014.The number of unemployed persons in the United States stands at around 10.2 million and unemployment rate at 6.6% changed little in January. However, the unemployment rate has dropped by a figure of around 0.6% since October. The unemployment rate for adult men is around 6.2% compared to that of women at around 5.9%.Teenagers unemployment rate is around 20.7%, whites(5.7 percent), African origin (12.1 percent) and Hispanics at 8.4 percent) showed little change in January. With the unemployment rate almost steady there were, however, some job gains mostly in the construction, manufacturing, wholesale, trade, mining but it was minimal to cause any change.
In the month of December, the unemployment rate in South Korea remained steady and unchanged but a few jobs were created compared to those in the previous month. The creation of these few jobs created optimism that the economy of South Korea may be on an upward trend to total recovery. The Korean National Statistical Office released data showing that that the unemployment rate rose 3 percent in December, which was the same rate as at the month of November. This unemployment rate has an equal measure to the out of every hundredth of the total population. That is used to explain the number of jobless people who are looking for jobs (Keithly,2013).
The interest rates in the United States of America have remained steady for some period now, but this is under threat that it may rise up in the coming days. However, the US fed Reserve is determined to defend the 3.0% interest rate level. The increase in the interest rates wouldn’t be good for the banks as it would mean that they would have failed to keep the rates steady. A crisis in the dollar lending rates would make the 10 year US Treasury Bond rise past the 3.5% level to 4.0% making the banks lose control. This is a major reason why the government ensures that the rate of interest remains steady throughout no matter how the economy is performing (Williams,2013).
The interest rates in South Korea have been at an all time steady rate of 2.5% even on the both prospects of a recovering economy. In domestic markets, in Korea, the financial markets had fallen and its currency had depreciated. This was as a result of international financial markets which was very unstable and also as a result of the outflows from the foreigners stock investment funds. Recently the stock prices have again gone up leading to the Koreas won appreciation. This has effectively led to long-term market interest rates fluctuation with a narrow range. (Keithly,2013).
The inflation rates in America have been recorded at 1.60% in January of 2014.This is the lowest it had reached since 1920’s where it had reached the highs of around 23.70%.The inflation rate changes in prices that the consumer will pay for his daily food not putting into consideration the prices of some volatile price items. This change in prices is referred as the consumer price index. In South Korea, the consumer price index rose to around 1.1% in December compared to the month of November in 2013 which was 1.2%. The highest inflation amount was in the 1980s which had risen to 32.51% and an all time low of 0.17 in February of 1999.The most important in consumer price index in Korea are housing, water, electricity, food and non-alcoholic beverages.
References
Executive Office of the President of the United States :. (2013). Budget of U.S. Government: Fiscal year 2014 : analytical perspectives. Washington D.C: US Government Printing Office.
Keithly, D. M. (2013). The USA & the world 2013. Lanham, MD: Stryker-Post Publications.
Williams, M. (2013). The political economy of competition law in Asia. Cheltenham [etc.: Elgar.
