Economic Analysis

The present economic situation of U.S.

The economy of United States, the world largest economy is not fully recovered from the financial crisis of 2008. The U.S is facing a lot of economic problems now days , but only few sees it as the many seems to ignore it thinking that we were the same super power as it was use to be but on the contrary U.S is on the brink of becoming a second class country in many aspects (Heffner, 2012). U.S is losing self sufficiency, they are not what they use to be the industrial growth is decreasing in the country as time passes by, and government is taking huge debts to sustain our way of living which is hard to afford these days (Heffner, 2012). The rate of imports has increased, and the exports have been decreasing and losing self sufficiency as time passes. And if this trend continues United States will definitely loses its status of super power as well (Heffner, 2012).

According to research, U.S. is getting dependent on foreign product, their financing and innovation and is losing self sufficiency leverage and national security, and due to these impacts the foreign affairs will suffer greatly (Heffner, 2012). U.S weakness even to grant predatory foreign trade practices: It is undermining U.S industries, instead United States encourage the manufacturers, engineers, and developers to work and produce in third world markets such as China and Mexico (Heffner, 2012).

Interest rate

The interest rate of the U.S. as recorded by the federal reserve's is 6.14% as from 1971-2013 at the highest of 20.00% in may 1981 and record low of 0.25% back in December 2008, the interest rate decision is been taken by the board of governors of the federal board and the federal open market committee (FOMC). The last recorded of interest rate of U.S. is 0.25% (Trading economics, n.d).

2009

2010

2011

2012

2013

2.4%

1.9%

1.1%

0.9%

0.25%

Inflation rate

The inflation in the U.S. has been recorded 1.80% in the month of June 2013. The report has been reported by the department of labor statistics. The inflation rate of the United States has been an average of 3.35% from 1914-2013. Reaching at its highest level of 23.70% in 1920 and at its lowest -15.80% in 1921. The most important area of unadjusted for all town consumers are (31% of the total index) commodities other than food and energy (20%), food account for 14% of the total index and energy 10%, transportation services holds around 6% of the measures and medical care services 5.5% (Trading economics, n.d). Following is the interest rate of past 5 years.

2009

2010

2011

2012

2013

-0.34%

1.64%

3.16%

2.07%

1.535

Unemployment rate

Current payroll employment in U.S is increased by 165000, and the unemployment rate is at the same level on 7.5% (Econedlink, 2013). Employment level is increased in professional and business sector, food and drinks services, health care and retail trade (Econedlink, 2013). As shown in the figure, it is clearly mention that the unemployment rate is decreasing every year.

2009

2010

2011

2012

2013

10%

9.3%

8.5%

7.8%

7.9%

Impacts of Interest rate, Inflation rate and Unemployment

The challenge that united state ...