It has been 6 years now, when the world’s largest and said to be the strongest financial economy, The United States, went into financial crisis and the tornado reached around the globe. However, with the continuous monetary and fiscal policies by the Federal Reserve, the economy of the nation, although has not fully recovered after the crisis, but is back on stable path. However, still there are mixed views about the current macro-economic situation of USA from different economists.
As per the recent data released by the US agencies, the country is still underperforming and the same is evident with low GDP forecast and poor job creation activities. During December, 2013, only 74000 jobs were created in the economy which was way less than the economist’s expectations of 200000 jobs. In an interview with Forbes Magazine, Diane Sownk, Chief Economist of Mesirow Financial Services said that the economy is expected to achieve GDP growth of about 3%.
However, the current economic statistics seem rather disappointing. The real GDP growth has been slow to close the gap between real GDP and its pre-recession trend, even incorporating the temporary pickup near the end of last year. The GDP recorded during last quarter of 2013 was 2.6%.
Even the growth in job opportunities has not been promising. However, the US Bureau of Economic Analysis indicates that the level of unemployment has reduced from 7% to 6.8%, but this decrease has been the cause of decline in labor force participation rate. The senior economist are though expecting that with good amount of business investment made in the economy, we can expect the unemployment rate to decline to 6.6%, but this drop will be slower as what we reached rapidly from decline in labor force participation. The recent economic numbers relating to unemployment has been favorable. While during October, 2013, unemployment rate was 7.2 percent, during March, 2014 it was 6.7 percent.
As for the rate of inflation, the economist are satisfied that the inflation rate has now averaged very close to the goal of the federal reserve of attaining 2 percent growth. The most current CPI Index recorded during February, 2014 was 1.126%.
However, by any measure, the performance of the US economy has not been stable. The graph below indicates as how dynamic has been the consumer spending and disposable income over some previous quarters, indicating unstable economic sentiments in the United States:
Thus, our brief analysis about current macro-economic situation in US indicates that, as of now the economic confidence and moral in US economy is again negative but the overall expectations of US citizens has improved. There were times during 2012 and 2013, when the economy showed sustainable signs of improvement in the form of improved GDP, declining unemployment rates, low interest rates re-boosting real estate demand and most importantly, the consumer spending increased top $88 per day during 2013, which was $16 higher than in 2012. However, the positive reports were halted when December 2013 economic data was released and again US economy was indicated of a negative growth in the employment sector as very few jobs were created.
Thus, if economic recovery it is most likely that in the initial years we may see only few, not all economic indicators improving.
Works Cited
Bureau of Labor Statistics. (2014). Economy at a Glance. Retrieved from Bureau of Labor Statistics: http://www.bls.gov/eag/eag.us.htm
Carlson, D. (2014, January 10). Economists See 3% GDP Growth Falling Jobless Rate In 2014. Retrieved from Forbes: http://www.forbes.com/sites/kitconews/2014/01/10/economists-see-3-gdp-growth-falling-jobless-rate-in-2014/
US Department of Commerce. (2014). Gross Domestic Product (GDP) Graph. Retrieved from Bureau of Economic Analysis: http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm
