ECONOMICS

Economics



Economics

Macroeconomic Conditions in the U.S Economy

The macroeconomic conditions in the U.S economy consist of several indicators that impact industry. The first indicator is Consumer Price Index (CPI), a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Used as an economic indicator, a deflator of other economic series, and as a means of adjusting dollar values, the CPI affects nearly all Americans as a result of its many uses (Bureau of Labor Statistics, 2011). According to a recent Economic News Release from the Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in March on a seasonally adjusted basis (Klein, 2003). Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment. Several transportation indexes posted significant increases, including new vehicles, used cars and trucks, and airline fares. CPI is one of the most frequently used statistics for identifying periods of inflation or deflation. This is because large rises in CPI during a short period of time typically denote periods of inflation and large drops in CPI during a short period of time usually mark periods of deflation.

Another indicator that affects the macroeconomic conditions is wage rates. According to the Bureau of Labor Statistics (2011), the median weekly earnings of the nation's 98.3 million full-time wage and salary workers were $755 in the first quarter of 2011 (not seasonally adjusted). This was 0.1 percent higher than a year earlier, compared with a gain of 2.1 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period. The rate of wages is a significant factor with in the Grocery/Supermarket industry. The Bureau of Labor Statistics, U.S. Department of Labor sites that the average weekly earnings in grocery stores are considerably lower than the average for all industries, reflecting the large proportion of entry-level, part-time jobs (Free, 2010).

There will be additional significant changes within the automotive industry over the next several months, many of which are predicted above. It is unfortunate, but most likely, that some automotive companies are not going to survive- at least not in their current size and configuration.

Political Ideologies on Unemployment and Economic Growth

Economist Isaac Cohen stated that unemployment in the country remained around 9% (Washington Post, 2011). This means that the economic recovery is still not strong enough to give employment to all people who became unemployed in the recent recession situation.

Serious actions were taken by the US government in past two years to revitalize economic growth in the country and the employment level. This involves implementation of budgetary measures and creating alternative policies to instigate economic factors growth. Lack of continuity in policies, often within the same period, have created changes in effective implementation of government policies. In order to have full control over the situation resulted due to recession in economy, government approved multiple legislations to safeguard the interest of people and protect the economy ...