State of Us Economy

In: Business and Management

Submitted By sandskik
Words 1083
Pages 5
This essay shall discuss the most current U.S. GDP figures and the current state of the economy. It will also discuss how the current state of the economy will or will not impact my organizational profitability, using the Timken Company. The most current figures available for GDP are in reference to 2014.
GDP is the measure of all final goods and services made in a year, and made in the United States. This does include foreign country operations that are located in the U.S., however it excludes U.S. plants in foreign countries. The GDP numbers are important because it represents how well the economy is doing. An economy doing poorly will have lower profits for businesses, which effects stock price. This is significant to investors that look at GDP growth, and if it is negative it could suggest that the economy is in a recession. The real GDP is the most looked at figure in discussion with the economy. Real GDP is comparing one year to the other taking out the effects of inflation calculated by the Bureau of Economic Analysis (BEA).
According to the BEA, the U.S. GDP increased 2.4 percent in 2014 from the figures found in 2013. The results I will also look at is the latest fourth quarter of 2014, because GDP is reported quarterly as well. The GDP is a very in depth and comprehensive report, therefore I will concentrate on the most important numbers that the report contains. The extras that the report contains breaks down personal consumption expenditures, gross private domestic investment, net exports of goods and services, government consumption expenditures and gross investment. What is important to investors is the fact that GDP is growing around 3%. According to Investopidia, “The general consensus is that 2.5-3.5% per year growth in real GDP is the range of best overall benefit; enough to provide for corporate profit and jobs growth yet moderate…...

Similar Documents

Current State of the Economy

...Current State of the Economy Our economy has been in a recession for the past few years, but looking into the key indicators for our economy one can see that small glimmer of light shining from the end of the tunnel. The key indicators as mentioned above include: the current Gross Domestic Product (GDP), whether the economy is expanding or contracting, the unemployment rates, the credit card rates, the U.S. Prime Rate, and inflation. These key indicators may give one that glimpse of hope that maybe; just maybe our economy is gaining better ground. Gross Domestic Product (GDP) To have a full understanding of our expanding economy one must first understand the Gross Domestic Product (GDP). The GDP is one of numerous national income and output measures. The GDP represents 24.35 percent of the world economy; this is reported by The World Bank Group. As of 2011 the National GDP was found to be worth 15094 billion US dollars. There are three ways to define the GDP and gain identical results (Trading Economics, 2012). Defines the GDP First, the GDP, within a specified period of time, will be equal to the total of goods and services produced. Second, the GDP will be equal to the sum of the value of production. Third, the GDP is equal to the sum of the income generated by production (Trading Economics, 2012). Expansion Our economy is currently expanding but has yet to be found in recovery mode. When the level of GDP lies below the peak of the previous expansions is when...

Words: 1366 - Pages: 6

Us Economy

...US economy has witnessed several recessions and the recent one being in the year 2008. The economy needs lot of support from Government in terms of fiscal and monetary policies. With the investments shrinking, jobs moving to other countries, un-employment rate is at very high levels which has direct effect on consumer spending and housing market. Although some policies are showing some signs of relief, most of them take a long time to have positive effects. In my opinion, the economy in US is recovering from the most severe recession and it requires as much support which will involve both monetary and fiscal policies. Investment in the economy has dropped by more than a quarter in the recession and an expansionary monetary policy that lowers interest rates will encourage firms to increase investment. It will also help increase consumption as people can borrow at lower interest rates. The options that are left in front of the Fed are more open market operations and a more direct involvement in the financial market by providing lines of credit and short-term debt. The economy also needs direct stimulus from the government since monetary policy can only provide incentives to firms and households to spend, not actually increase spending. In the present situation, Government should carefully plan the budget and should cut down lot of expenditure on our foreign policy which helps on cutting down our federal deficit. Government should raise taxes for wealthy individuals &......

Words: 820 - Pages: 4

The State of the Economy

...What is The State of the Economy? How is the U.S. economy doing in 2012? Based on my research…. It is not doing nearly as well as some may want us to believe. Although things look to be stable at the moment, I fear that the upcoming presidential election, dependent on which way it goes, could lead us spiraling down a path that will take us years to dig out of. We have accumulated way too much debt, we consume far more wealth than we produce, millions of our jobs are being shipped overseas, unemployment is at a 5 year high, family budgets are being squeezed more than ever, gas prices are out of control and the housing market will take years and years to recover. Let’s start with the United States Deficit, which is currently at $16,202,358,883,742.16 and rising. The National Debt has continued to increase an average of $3.89 billion per day since September 28, 2007. Another contributing factor to the poor running economy is the unemployment rate. The unemployment rate is currently at 7.8%. Although it has declined in the past month it has nearly doubled since 2007. The percentage of working age Americans that have jobs is not increasing. The employment to population ratio has stayed very steady (hovering between 58% and 59%). If you gathered together all of the workers that are "officially" unemployed in the United States into one nation, they would constitute the 68th largest country in the entire world. We need to start looking in our own backyards and......

Words: 564 - Pages: 3

Us Economy

...Worth published quizzes Chapter Supply and demand Stone CoreEconomics Chapter 3 completed | Top of Form 1. (T/F) The major benefit of markets is that they bring sellers and buyers together to transact business.   a. True  b. False 2. (T/F) The law of demand states that demand increases (demand curves shift to the right) when income increases.   a. True  b. False 3. (T/F) All markets have roughly the same number of buyers and sellers.   a. True  b. False 4. (T/F) Demand curves always have positive slopes reflecting the law of demand.   a. True  b. False 5. Which of the following is not a determinant of demand for orange juice?   a. consumer after-tax income  b. price of tomato juice  c. medical research on the benefits of orange juice  d. agricultural subsides (government payments) to farmers to grow more oranges!  6. Which of the following will cause an increase in the demand for steel?   a. Price of automobile tires increases because of a shortage of rubber from Malaysia.  b. Concrete steel reinforcing rods are replaced by aluminum to reduce rust along the Atlantic seaboard.  c. Gasoline prices are reduced by 50% because OPEC countries break into a quarrel and all countries expand production.  d. McDonald's increases its production of hamburgers and fries to meet demand when a medical study concludes that fries are healthy alternatives to vegetables. 7. Which of the following is not a determinant of demand for MP3 players?   a. the price of......

Words: 1276 - Pages: 6

Current State of Us Economy

...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......

Words: 635 - Pages: 3

The Us Economy

...The U.S. Economy In 2008, the state of the economy took a major hit. The housing market tanked, consumer spending was down, and the banking system virtually shut down. But after five years of struggling against the tides, and despite the occasional bumps in the road, the US economy is making a strong come back. Combined with the incredible fortitude of the American people and cyclical recovery forces, the economic outlook is stronger than its been in over a decade. A major contributing factor the economic downturn was the housing market. During peak economic activity, single family housing averaged 1.5 million before the housing bubble burst. After the burst, housing began to plunge at an alarming rate of approximately 500,000 for nearly three years. New home sales declined a third of what they were before the collapse, a fate not seen since the 1930’s. But now, the housing market has done a complete turn around and is in full upswing. The number of new home sales has increased and has rebound to its original average of about 2 million nationwide. Some foreclosure units are still in inventory, but that number continues to fall. Demand is also playing a significant role as the U.S. population will continue to increase some 8% over the next decade. This means residential investments will increase by 15% to 20% annually over several years causing a significant ripple affect over the entire economy. (Altman, 2013) During time of hardship, the American people were spending......

Words: 856 - Pages: 4

State of the United States Economy

...Evan DiLauro ECON 152 12/3/13 The State of the United States Economy By looking at the past five years of data, it is clear that the United States economy is in a state of rebound from the Great Recession. The data shows that before the recession the United States’ economy was operating at a solid level. The recent numbers show that the economy is on its way back to the state it was in before the recession hit. The Great Recession began in December 2007 due to major factors that lead to economic turmoil. Causes of the recession include failure of the federal to stem the tide of toxic mortgages, breakdowns in corporate governance, a excessive mix of risky barrowing by the households and wall street, key policy makers were not prepared for the crisis, and breaches in accountability and ethics at all levels. Due to the combination of these factors the Great recession was started and did not officially end until June 2009. During this time the unemployment rate took an all-time high and GDP growth was slowed down and at one point went negative. This was a rough time for the United States financially. Many people were in debt and did not have a job. The housing market also crashed, leaving Americans with little money and high prices on real-estate. Consumer cutbacks took a major increase, which also increased inflation, which lead to the decrease in GDP. Although the recession ended in 2009, it was the worst year for the United States unemployment rate. The annual......

Words: 1290 - Pages: 6

Complexities of the Us Economy

...Complexities of the U.S. Financial System Professor Crawford Finance 100 10/28/2014 Complexities in the US Financial System The Federal Reserve System is the most powerful component of the US Economy. The Federal Reserve is made up of four components. There is a seven member Board of Governors that direct monetary policy. A 12 member Federal Open Market Committee (FMOC) that sets the target for the federal funds rate which also guides the Federal Interest Rate. 12 regional banks that supervise commercial banks in their respective regions, these regional banks also implement monetary policy for the commercial banks to follow. The FED also has a designated Economist who provide information and reports to congress. The Federal Reserve’s primary function is to control inflation without triggering a recession. The FED’s work together with the Treasury Department to avoid or counter any global financial crisis. The FED has been diligent in the past 20 years and more effective in the past decade to assist in the rebound of the economy crashing in the mid 2000’s. “The financial crisis of 2008 led to the worst recession since the Great Depression of 1929. This was despite aggressive efforts by the Federal Reserve and Treasury Department to prevent the U.S. banking system from collapsing. As a result of the recession, housing prices fell 31.8% (What Was the 2008 Financial Crisis? Causes, Costs and Whether It Could Happen Again, by Kimberly Amendeo) more than...

Words: 563 - Pages: 3

State of the Economy

...The nominal (current dollar) GDP was $17,710.7 billion. The figure was a 2.5% change from the 4th quarter of 2013. A recession, also called an economic decline, is a period identified by a decrease in GDP rates in two successive quarters. In that period, industrial activity and trade are at a decline. In the last two quarters of 2014, GDP has been at an increase indicating that the country is not suffering a recession. In quarters 3 and 4 of 2008, the GDP was falling showing that the country was undergoing a recession then. It is essential to differentiate between real and nominal GDP because nominal GDP does not account for inflation and may thus give a misleading view of the current state of the economy. The affiliation between real GDP and unemployment is explained by Okun’s Law which states that a 2% increase in real GDP reduces unemployment by 1%. There was a 0.8percentage increase (before seasonal adjustment) in the CPI-U in December 2014. The data is as per the Economic News Release of Friday, January 16, 2015. The inflation rate for the last six months was lower than that of the last 12 months. The lower rate is good since consumers are not charged more for products. It can be argued that a good rate of inflation is one where the rate remains steady over time thus eliminating uncertainty. The civilian unemployment rate was 6.6% for January 2014. The unemployment rate has been falling since November 2009....

Words: 299 - Pages: 2

Us Economy and Gdp

...1. In 4-5 paragraphs, discuss the history of the US economy including productivity, growth, markets and government regulations. 2. In 2-3 paragraphs explain GDP: what items are included & excluded and why intermediate goods and services are usually not included directly in GDP. 3. Rank, i.e. list, the following in order of increasing (from negative to positive) cross – price elasticity of demand with coffee. Explain your reasoning. - Bleach - Tea - Cream - Cola 4. In 3-4 paragraphs, provide examples and discuss how the “Rules of the Game” impact the US economic growth and productivity. What current US economic Rules of the Game are impacting economic growth today? 5. In 2-3 paragraphs, discuss how markets coordinate the independent decisions of buyers and sellers? • In 4-5 paragraphs, discuss the history of the US economy including productivity, growth, markets and government regulations. The US economy has evolved significantly over the two hundred-plus years of its existence. In the early years, most productivity was similar to the rest of the world. The country was nearly all agriculture and growth was dependent upon gaining more land. As the years went on, the country was growing quickly. Agriculture was still a large part of the economy, but industry was beginning to take a much larger share of production. The country was rich in resources like Coal and iron ore, and improvements in physical capital made farming easier and more......

Words: 1497 - Pages: 6

The Us Economy

...The US Economy Clark University The US Economy Like any economy, the United States experiences growth, contraction, and periods of increased volatility throughout any given time period. This analysis seeks to provide a concise report of the current state of the US economy based on the latest data metrics provided in the reports published by the Wall Street Journal. The following information delves into the quantitative and qualitative aspects of the economy’s growth and employment, consumer activity, inflation, housing construction and sales, and international trade. The first metric to be examined is more than likely the one that the average citizen thinks of when thinking about the current state of the economy: Unemployment. It affects virtually every metric from the Gross Domestic Product (GDP) to the Consumer Price Index (CPI). The long term figures by the Bureau of Labor Statistics noted in Appendix A display that the unemployment rate has been on the decline for a significant period of time, and furthermore, is expected to close the 2015 year at a rate of 5%, with the potential to plummet further to 4.6%. The decline appears significant, especially considering the Labor Force experienced growth. Secondly, the GDP should be taken into consideration, as it’s one of the most useful statistics when looking at the health of an economy. The GDP for October is 18 trillion dollars, down from 18.01 trillion in September. As explained in the......

Words: 711 - Pages: 3

Us Healthcare Industry and the Us Economy

...The Love-Hate Relationship between the U.S. Healthcare Industry and the U.S. Economy The healthcare industry plays an important part in the economy of the United States. The sustained increase and high level of spending on health care has been the subject of discussion and scrutiny for several decades. The enactment of the Patient Protection and Affordable Care Act of 2010 (ACA) was hardly the first fiscal policy for healthcare in the history of the economy. There is a long list of fiscal policy attempts from predecessors such as Franklin Roosevelt, Harry Truman, Richard Nixon and most recently Bill Clinton (Sparer, p462). In 1933, Franklin D. Roosevelt drafted amended provisions to his pending Social Security legislation to include publicly funded health care programs but ultimately removed the provisions due to opposition by the American Medical Association (Coombs, p5). Following the Second World War, President Harry Truman called for universal health care as a part of his Fair Deal in 1949 but strong opposition stopped that part of the Fair Deal (Peon, p161-168). On July 30, 1965 President Lyndon B. Johnson signed into law the legislation establishing the Medicare and Medicaid program, social insurance programs administered by the United Stated government providing health insurance coverage to people who are either 65 or meet other special criteria for need (Roemer, p845). In October 1972, President Richard Nixon signed the Social Security Administration......

Words: 3827 - Pages: 16

Improving Us Economy

...Paul Garrido Prof. Bayes September 30, 2014 ! Improving US Economy The United States economy relies heavily on world trade. Natural gas and oil companies, and the importing and exporting of their goods, play a major role in the fluctuation of the economy. However, regulating imports and exports is easier said than done. Opinions differ between those at the top of these companies and also between other influential members of our government, including the President of the United States. President Obama believes that we can improve our economy with the increase of fuel exports. Andrew Liveris, the chief executive of Dow Chemical (a company that depends on natural gas) believes otherwise. He believes that if we export our natural gasses, the economy will be impacted negatively. Both President Obama and Andrew Liveris share a common goal; the bettering of the economy of the United States. The United States has been using energy to reshape the economy. During his presidency, President Obama has driven the value of U.S. fuel exports in a positive direction. Obama hopes to double the fuel exports from the United States by 2015. He believes that fuel exports will help create middle-class jobs in the manufacturing industry. This boost in middle-class jobs, along with money earned from exporting these goods, can potentially be the stepping stone to improving the economy. GARRIDO 1 ! Andrew Liveris has a different outlook then Obama. He views the exporting...

Words: 407 - Pages: 2

Economy in Us

...ECO 2013 Name: Denicson Suarez Article 3 When The U.S economy is the envy of the world ECO2013 Name: Denicson Suarez Article 3 When the U.S economy is the envy of the world. Right before the new job numbers report came out, Catherine Rampell who is a journalist brought a very good point by telling to those who are not happy with the recovery of the U.S economy that it could have been worse. According to Benen, people tend to forget the reason of the actual slow recovery of the U.S economy. One of the main reasons of the slow recovery is that the global crash in 2008 has been the worst in years since the Great Depression happened. However, it is encouraging to compare the U.S recovery with the rest of the world, reason for which President Obama in one of his weekly address quoted that U.S is the envy of the world. Despite the strengthening of the economy, the creation of about 11 million new jobs, more Americans with health insurance, President Obama said that there are a lot work to do in order to create the strongest economy ever. He compared the growing of the U.S economy with countries from Europe and Asia and by far we have a great advantage over them, and as Rachel Maddow said in her show “the U.S. remains a standout as the rest of the world struggles.” Despite the good news there are a lot people that still unhappy with the recovery of the U.S economy, and some people argue that the creation of new jobs have been based in just part-time jobs.......

Words: 415 - Pages: 2

Fall of Us Economy

...Marrero Poli Sci 101-51 April 6, 2015 During the later half of the 20th century U.S economy was the most powerful economy in the world, they set the rules for rest of the world. They established multinational corporations all over the world, which was indeed the heart of world economy. (Davis, 2009) When the U.S economy was rising, all the other countries’ economies were also growing, at the same time when their economy went down it affected almost all the other importing and exporting countries in the world because of the recent crises which was named as “GLOBAL FINANCIAL CRISIS”. This was meant to be the biggest crises after “THE GREAT DEPRESSION 1930” (Cambridge Journal of Economics, 2009). The crises have already recorded loss of over $150 billion and large numbers of banking institutions have declared bankruptcy or being sold. (Kregel, 2008) One among the banks filed for bankruptcy was Lehman Brothers, which was Fourth largest investment bank in U.S. (BBC, 2009). Therefore it is important to identify causes of current financial crises and resolution measures. Secondly, UK government should take effective steps in order to reduce danger of further crises. (Turner, 2009) During the later part of the 20th century, that is 1973, Daniel bell published a book titled “THE COMING OF POST INDUSTRIAL SOCIETY”. The book was about forecasting to find the changes in economy and society in the United States. One of the most visible changes according to him was the work force......

Words: 1757 - Pages: 8