The Current Macroeconomic Situation
ECON 312: Principles of Economics
Summer B, 2011
CURRENT ECONOMIC SITUATION 2
The current macroeconomic situation in the United States of America according to the article Economy in the United States that it is the world’s largest national economy, but has been going through a shaky economy. In 2010 the nominal GDP was around $14.7 trillion dollars. It also is a very high output when looking purchasing capita. The U.S. is one of the largest trading nations in the world with its three largest partners being Canada, China, and Mexico. According to CNN Money.com since there has been financial troubles in the past years, and the U.S. has been hitting stumbling blocks, unemployment, lack of jobs, and possibly facing a double dipped depression things are starting to look up in certain areas. In the current month of October Medium sized businesses, with payrolls between 50 and 499 employees added 36,000 jobs in the month, while the nation’s largest businesses shed 5,000 jobs. According to the CNN article most of the jobs were added in the service-producing sector. In the larger sector they are predicting even more job cuts with larger business including government cut backs such as 51,114 military positions. Banks also are forecasted to have a large amount of jobs lost with 31,167 cuts announced ion the month of September. So even though the United States economy is supposed to be the World’s largest national economy the outlook at this time is very shaky and bleak. People are very hesitant to invest, and are hanging on to any money that they have. People are in fear, and can’t afford to lose money in this time of a shaky economy. Unemployment Concerns
The labor force is defined as the number of people employed plus the number unemployed but seeking work. When studying the overall macroeconomics there are several types of unemployment that have been identified. Frictional unemployment which looks at the time they give to people to find and settle into new jobs. The second is Structural unemployment which looks at employer’s skills verses jobs available in that certain trade. Last is Natural rate of employment which is the sum of frictional and structural unemployment. The last reported unemployment rate was 9.1% in August of 2011. CURRENT ECONOMIC SITUATION 3 According to the article United States Unemployment Rate giving information on trends on unemployment from the year 1948 until 2010 the Average was 5.70, except it reached a record high of 10.80 percent in November 1982. This shows that are unemployment rate is very high at this time. Which greatly affects the U.S. economy? If people do not have jobs, therefore they are not making money to spend and do not have purchasing powers to keep the economy at a rise. If the number of larger business keeps lying of more people in months to come the economy is only going to worsen. At this current time fields like healthcare are on the rise when government employment continues to plunge. The number of unemployed people reported in the month of August was at an estimated rate of 14 million. The major groups of unemployed are adult men at 8.9%, adult women at 8.0%, teenagers at 25.4 %, whites 8%, blacks 16.7%, Asians 7.1% and Hispanics 11.3%. The number that were reported on long term employment meaning jobless for more than 27 weeks and over was accounted for 42.9% of the unemployed. Part of this problem of people staying on unemployment for such large periods of time is many of the jobs have hired there standards in such a tight job market while lowering how much they want to pay. Some jobs which were higher paying, now pay minimum wage and many people receiving unemployment are making more than...