Current State U.S Economy

Topics: Macroeconomics, Inflation, Unemployment Pages: 2 (665 words) Published: December 2, 2012
The current state of the economy is one that is concerning for almost all Americans.Though we are in the recovery phase businesses are still hurting, people are out of work, we are barely getting out of a depression etc. People are pointing fingers at what is the cause and who is to blame. What was once a strong healthy economy has now drastically changed. There are many economic indicators that are used to evaluate and provide an image of what is currently happening and what an outlook may be on the economy. Several of the important factors are the business cycle, consumer price index, stock prices, consumer confidence index, gross domestic product and unemployment rates. The overall picture of the economy is relevant to its current business cycle. The business cycle is the recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. The five stages of the cycle are growth, peak, recession, trough and recovery. As stated before we are in the recovery process but at a slow rate. One indicator is the Gross Domestic Product.The Gross Domestic Product (GDP) is the total market value of all goods and services produced, including total consumer, investment, and government spending, plus the value of exports, minus the value of imports. It moves with the economy and describes what’s happening right now. The GDP was at a huge decline a few years ago which resulted in our recession. Currently it has increased by 2.7 percent which is indicating an improving economy. Another indicator is the Consumer Price Index. The Consumer Price Index (CPI) is a measure of the change in the purchasing power of currency and the rate of inflation. It shows the current price of a “basket” of goods and services in terms of the prices during the same period during the previous year. The purpose of the CPI is to show the effect of inflation on purchasing power. The “basket” of goods and services includes energy (gas prices) and food as well as...
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