In each year, the Government is expecting to improve the country’s economy. With the help of gross domestic product (GDP) has reached a high value of all goods and services produced in a given time. This spring, the Economy grew slower than the previous expectations. All the unexpected movement that has been processed through the country’s economy creates that fear of falling into another recession.
The initial rate was 1. 3 percent for the months of April to June and the economy expanded only 0. 7 percent in the first six months. Yet they still expect a better growth of the economy for the second half of year will also help to avoid falling into the dreaded recession, but not enough to predict the rate of employment. Consumer spending represents 70 percent growth. The profits of the companies had remained stable and even increased by 1. 0 percent. Some reports speak badly about the state economy by giving some suggestions a bit extreme. However, other reports offer a more optimistic picture in a new report with more recent data than the first and hopefully raise the growth of the economy in the country.
As already mentioned above, the GDP (Gross Domestic Product) is the value of all final good and services produced during a given year. We can also consider it as standard of living. Is the result of Consumer Spending, Government spending, gross investment, exports and minus the Imports. Based on the article on which I am writing, the expectations of the government were not the same as those predicted, as is fea red to reach an economic recession. When the gains that 1 have been made to improve economic expectations do not cover in order to reduce the annual
percentage rate, cause other problems on the business cycle, for example, a large percentage of unemployment. That only happens when the economic system is too low or in a state of recession. Naturally the lack of jobs affects the growth of the country, so this situation decreases when the system is going on in the recovery process. (Picture I) Page 6 Economists are people assigned to give reports of the current situation, suggest solutions, making statistical comparisons between one year to another in order to improve the economic status of the country.
Many economists believe the economy is at a critical moment, on the other hand, is expected to improve later this year. Consumer spending accounts for about two thirds of all spending in the economy. If the level of consumer spending is high, the economy will experience high levels of production and employment, so there will be a boom in the economy. On the other hand, if the level of consumer spending declines, the level of output and employment will decrease and therefore the economy will stagnate. For example, say that in a large company like Walt-mart, which handles a large number of employees, failed to dispatch a number of products estimated for a given time.
For lack of customers, will undergo a kind of economic downturn which will have to slowdown of all products that have not been consumed, perhaps because of the expiry dates etc. Another reason could be to improve the products. The case here is that if there’s not been a good sale year, there will not be good earnings too and consequently, big lost when doing the budget for employee payroll. Will have to reduce the number of employees which caused an unemployment rate.
As we can see in the article referring to the consumer spending. “Consumer spending was revised up 2 to a 0. 4 percent gain, slightly better than the first estimate of 0. 1 percent. Still, that is the weakest growth since the final three months of 2009. ” Government sector is a key part of the economy, the nature of public sector institutional arrangements varies according to specific the state’s role is to be primarily engaged in national security, internal security, justice and services that provide assistance in the areas of health, education, retirement and in some cases protection through insurance programs or improvements to tackle structural unemployment.
The government as well as agents, also has a budget constraint, these are the revenues from tax sources or internal and external financing, and such income is applied to government spending that is made in the purchase of goods and services or investment in public goods. (Picture II) page 6 The annual rate gives an estimate of how much would the return on investment if the growth rate remains constant, can also be used as a reference framework for business growth.
That is, if for one year a company had profits of 70%, but the other years were more moderate earnings say a 10% annual rate will give us a real value and close to 10% compared to what would give us an average, which would be higher and would be a fictitious value. Based on the article, the US economy grew at an annual rate of 1. 0 percent slowing that the previously estimated. Some economists also consider the possibility that the sell-off this summer in the stock market affects growth.
Especially since it has lost 12 percent. stock market are a type of capital market that trades in the shares of public companies and debt statements made by companies in a structured, meaning through the sale of securities. (Picture III) page 6 3 Finally, summarizing the economic situation and all content at work, we highlight the most important points. It allows the channeling of the medium to long term investors to users.
The pace of U. S. economic growth remains slow to moderate in most regions of the country. The business services sector reached levels higher than those recorded in the previous report, as well as manufacturing activity expanded at a steady pace in most of the country. The Fed found that the number has raised executed bank loans and a stronger way the mortgages and the construction sector recorded a slight increase in single-family properties and slow growth in the construction of commercial property. Most districts reported favorable conditions for agriculture, just as energy and mining sectors compared with the previous report so according to the Fed, the wages of Americans were stable in all districts and suffered a moderate rise in prices.
Also, this assessment of the situation is almost identical to the previous version of the report in mid-October, which describes the growth as moderate or mild. In its second report on the evolution of GDP between April and June, the Commerce Department revised down its first estimate of a 1. 3 percent growth. The poor growth of 1 percent between April and June, due in part to the slowdown in export growth, which increased only by 3. 1 percent from 6. 0 percent noted in the first calculation.
After an average annual growth of 2. 9 4 percent in 2010, the highest in five years, the slowdown has already begun in the first quarter, up 0. 4 percent. Despite the upward revision of this indicator in the United States is more than two thirds of GDP, its growth is well below the 2. 1 percent recorded between January and March, and is the worst quarterly figure for more than one year. Unemployment rate has increased by 1 percent, but economists are in the wait for an improvement of the situation. There have been some very positive reports by the end of the year. 5 Picture (I) Recession and recovery Business Cycle. Picture (II) Consumer and Government Spending. Picture (III) Annual rate.