February 05, 2013
University of Phoenix
The Current State of the Economy
Knowing the state of the economy is beneficial to people in general. People tend to make financial decisions based on current rates and financial income. By knowing the current market and the state of the economy, the public will be better prepared and be informed before making important financial decisions, like buying a house.
The current economy is contracting instead of expanding. While, there was an expansion from -2.6% in 2009 to 2.8% in 2010, the economy shows a contraction from 2.8% in 2010 to 1.7% in 2011. Staying aware of a contracting and expanding economy can be beneficial because it will help in making decisions on whether or not it is a good time to spend money that was saved for luxuries instead of saving the money for future necessities.
Another important information to know in determining the current state of the economy is the WSJ Prime Rate. As of December 12, 2012 the WSJ Prime Rate is 3.25%. This rate is used to determine current interest rates on loans and credit cards. The lower the WSJ Prime Rate the better the odds are of receiving a better interest rate.
Credit cards are a tool people use on a day-to-day basis. It is important to be aware of the current interest rates credit card companies are offering because it can have an impact in financial planning as well as financial decisions. A good way to get an idea of what the interest rates for credit cards may be in the near future is to look at the three-month credit card rate trend. This will give the general public a comparison to use when trying to figure out whether or not an existing credit card has a high interest rate. As of December 12, 2012, the credit card interest rate is 14.02% on a fixed card and 14.58% on a variable card.
Another way to know the state of the economy is by looking at the current unemployment rate. A high...