Economic Indicators
Jesse Manso
9/16/2014
Tues/Thurs 10:50
BUS101 Assignment on Economic Indicators 1.) Housing starts lowest in months Housing starts are the number of new residential construction projects that are being done at a given time. When housing starts are particularly low it could mean bad news for the economy and also for both large and small businesses. If houses are not being built, people are not spending money on the initial construction. If there’s not construction, there are no jobs being created. If there are no homes being built then their are no homebuyers spending money on the items to furnish their homes. Therefore small and large businesses are not able to generate business. 2.) Fed lowers discount rate and interest rates tumble When the Federal discount rate is low, interest rates tend to be lower as well. This could be a bad indicator for the economy because most times lowering interest rates is a technique used to try to stimulate the economy. The economy only needs stimulated when it isn’t doing so well.
Once the interest rates are lowered people are more likely to be able to borrow which will be great for the economy and for large and small businesses. When money is borrowed, it will then be spent, creating a boost in the overall economy. 3.) Retail sales up 4 percent over last month Retail sales being up is a very positive indicator for the economy. It means that people are spending money, which means people are making money. This is also good news for both small and large businesses because when sales are higher in small business, more product must be ordered from the larger businesses. 4.) Business debt down from last year Business debt being lower can be both a good and bad indicator for the economy. It’s bad because it could mean that businesses are less confident and worried about taking on more debt.
It’s good in the sense that overall, businesses are making enough money to keep
9/16/2014
Tues/Thurs 10:50
BUS101 Assignment on Economic Indicators 1.) Housing starts lowest in months Housing starts are the number of new residential construction projects that are being done at a given time. When housing starts are particularly low it could mean bad news for the economy and also for both large and small businesses. If houses are not being built, people are not spending money on the initial construction. If there’s not construction, there are no jobs being created. If there are no homes being built then their are no homebuyers spending money on the items to furnish their homes. Therefore small and large businesses are not able to generate business. 2.) Fed lowers discount rate and interest rates tumble When the Federal discount rate is low, interest rates tend to be lower as well. This could be a bad indicator for the economy because most times lowering interest rates is a technique used to try to stimulate the economy. The economy only needs stimulated when it isn’t doing so well.
Once the interest rates are lowered people are more likely to be able to borrow which will be great for the economy and for large and small businesses. When money is borrowed, it will then be spent, creating a boost in the overall economy. 3.) Retail sales up 4 percent over last month Retail sales being up is a very positive indicator for the economy. It means that people are spending money, which means people are making money. This is also good news for both small and large businesses because when sales are higher in small business, more product must be ordered from the larger businesses. 4.) Business debt down from last year Business debt being lower can be both a good and bad indicator for the economy. It’s bad because it could mean that businesses are less confident and worried about taking on more debt.
It’s good in the sense that overall, businesses are making enough money to keep