This paper will be a discussion of the current economic condition of the United States and this writer’s opinion on how it can be changed. Unemployment is high and needs to be reduced to full employment. We will explore the inflation rate, GDP growth and other factors of our current economic situation.
The main factor that put us in a recession in 2007 thru 2009 was the crash of the housing market and subprime loans. Are we are no longer in a recession. But where are we?
Though the recession started in 2007, unemployment is still high. The January 2014 unemployment rate was 6.6%. (U.S. Department of Labor Staff, 2014) This is down from the 2013 unemployment rate of 7.4%. In 2007 the unemployment rate was 4.6% (better than the full employment rate of 5%). The unemployment rate peaked at 9.6% in 2010. (U.S. Department of Labor Staff, 2014) The unemployment rate is not what we would like to see but it is getting better and will eventually get back to full employment.
Projections by the Bureau of Labor Statistics do not give us much hope for a quick
return to full employment. “Slower projected growth in the civilian non-institutional population
and declining labor force participation rates limit growth in the labor force, which in turn limits
economic growth.” The growth in the labor force from 2012 to 2022 is projected to be .5% per
year. That is down from the .7% in the years from 2002 thru 2012. (U.S. Department of Labor Staff, 2014)
“The latest annual inflation rate for the United States is 1.5% through the 12 months ended December 2013, as published by the US government on January 16, 2014.” ( CoinNews Media Group LLC Staff, 2014) The lowest inflation rate for the period of 2007 thru 2013 was 2009 at a rate of -.4%. The highest inflation rate during the period of 2007 thru 2013 was 3.8% in 2008.
Bloomberg.com in an article by Shobhana Chandra and Steve Matthews written on February 14, 2014 predicts that the inflation rate at 1.3%. This is the outlook of most economists. Prices in the U.S. may increase more than many expect this year, says David Rosenberg. Rosenberg stated, the Federal Reserve, through efforts to spur growth, “is carrying out the mother of all reflationary policies,” he said in an interview. “My bet is the Fed will ultimately get what it wants, and then some.” (Chandra & Matthews, 2014)
“The BLS expects the gross domestic product (GDP) to reach $14.7 trillion in chained 2000 dollars by 2014, an increase of $3.9 trillion over the 2004–14 span. This translates to an average rate of growth for real GDP of 3.1% per year over the period, a tenth point lower than the historical rate of 3.2% from 1994 to 2004.” (FFN Editors, 2014) The growth of the GDP is projected to be a little lower than average.
“Between 1996 and 2000, the United States experienced a combination of full employment, strong economic growth, and very low inflation. Specifically, the unemployment rate fell to...