The United States economy in 1990

Economy

The United States and world economies have been sputtering a bit as the world has to contend with the likes of external economic issues such as inflation, the effects of past and potential future acts of terrorism, the ongoing oil crisis and the War in Iraq. Corporate America has been highly profitable but at the expense of relocation to new emerging markets abroad. The automobile industry and manufacturing as a whole has needed a lift as cheap labor and other economic necessities have cut jobs all over the United States. Consider what has occurred in the airline industry.

Companies have had major economic problems such as the ever increasing price of jet fuel and other resources, the pressure of maintaining and replacing aging fleets and new human resource concerns like salaries, healthcare costs and tough competition. Most Americans only thin that the airline problems mean fewer flights. But the industry employs a larger portion of the American population in one way or another and the failure of any airline, or the closing of an automobile plant in Detroit affects us all. This report tries to look at the overall economic conditions and the effects on the American people.

The Gross Domestic Product is a very good way to watch what is happening in the United States in regard to the economy. Although the United States is out of a recession, we as a nation are not keeping pace with the majority of the world as far as output is concerned. For example, in the United States the eighteen month forecast for the Gross Domestic Product was expected to remain around two point seven percent annually but in comparison the combined first world nation's Gross Domestic Product has been estimated to be steadily growing at over three percent. As our nation has a major debt issue and a totally unbalanced trade deficit, the world's progress will continue to force our nation to be a debtor nation and we will continue to fall behind in trade.

Another good monitor for our economy is inflation and a great way to monitor that is the Consumer Price Index. The Consumer Price index is used to measure the change in the cost of our typical wage-earner's purchases for both goods and services. Think about the recent trends in the price of oil. Every manufacture in the world is dependent on oil or some other fuel to power plants and the typical American needs to heat his home and drive his Hummer H2. Therefore, the price of oil is a great predictor of the cost of things in the future. Over the past few years, the trends associated with the cost of oil have continued to push to new levels and these trends seem to only be getting higher.

The pressure from the war in Iraq and other concerns like the recent tax issues of Russian producers have kept prices high. The Iraq war and the issues in Siberia have forced OPEC and other oil producing nations throughout Africa to boost production to offset world demand. but, the United States is dependent on foreign oil and the consumer pricing trends will continue to reflect the problems that are associated with that dependence like the possibility of inflationary.

The Unemployment Rate and the United States economy's job growth trends are another fine example of how things are going. The recent presidential race was very negative as both presidential candidates were quoting completely opposite outlooks for our nation's job growth and unemployment. If one was to have compared the numbers the Kerry and Bush campaigns used during November, their 18-month employment figures seemed to represent completely different countries. Bush used unemployment figures that were moving down near 4% and Kerry touted unbelievably high unemployment figures.

But, the true test was the labor department statistics and they concurred with the Kerry camp. Of course, if Kerry was right and Bush still won, these unemployment trend indicators entail problems on the horizon for the economy. The Bureau of Labor Statistics recently indicated that new jobs being created in our economy were not the types of jobs that fuel economic growth. It looks like the economy is and will continue to lose jobs to cheaper labor markets around the globe.

The Federal Reserve dictates the cost of money for organizations to borrow. The trends of continued cash shortages in corporate American our economy borrowing heavily. Therefore, future actions of the Federal Reserve will play a major part in America's future. Trends to observe for the Fed are the consumer consumption and governmental spending rates. The Bush administration is already having trouble paying its bills as they recently raised the national debt level. The Fed will have to continue to rise or lower interest rates to fight off inflation as well s keep the nation out of recession. The federal government's trends are once again increasing the deficit as the cost of maintaining Iraq and other governmental issues will continue to worry the Fed leadership.

The trend over the next eighteen months seems obvious. Iraq is nowhere near independent so countless billions will be spent maintaining the problem area and the recent weather catastrophes will cost the government a fortune to provide economic relief to victims. The consumer spending trends over the next eighteen months will also be of great concern to the airline industry. The Federal reserve must keep inflation in check so they will make sure that the goods America are buying at record pace will not fuel inflation.

For each of the economic indicators utilized to monitor and forecast the nation's economic outlook, a reconciliation of the monitored trends is in order. For the Gross Domestic Product, the U.S. And the World's GDP are well documented figures that can both be considered fairly accurate. The reconciliation for the trends for inflation as measured by the Consumer Price Index is obviously heavily dictated by the cost of oil. Although we can assume that oil prices will continue to climb, it is just that, an assumption.