Econ 201 301 Macroeconomics Final Report
Even though a lot of people seem to be talking about how bad our economy is and how bad things like the unemployment reals and Real GDP are, the economic situation is appearing to be looking up overall. For example, take a look at the growth in Real GDP.
According to The U.S. Bureau of Economic Analysis, the Growth in Real GDP in 2014 went up 3.5 percent and 4.6 percent, respectively. These numbers are positive and show the overall growth of the United States. However, the economy did suffer a negative GDP in the first quarter of 2014 of around 2 percent. This drop was the biggest drop seen since early 2009 when the Recession was winding down. The chief reason for this was due to Americans spending less than had been originally assumed. Other contributions to the steep decline in GDP are a drop in U.S. exports, high imports and a smaller buildup in inventories. This first quarter decline was brought up in the second and third quarter to around 4 percent in both quarters. Not only did the national GDP numbers increase and remain high, but in the year of 2013, but the individual states GDP’s are looking up also. Forty nine of the fifty states all saw an increase in their real GDP for the year. Kentucky saw a 1.6 percent increase in their real GDP. Also a look at the real disposable personal income rates in September of 2014 shows an increase of 0.1 percent. This number, while small, shows that things are starting to look up economically. Although numbers from past months were a little bit higher, the percentages have increased each month. During the recession of 2009, more and more people were fixing old cars or just buying used ones. According to an article in the New Yorker online newspaper, the average age for a vehicle on the road was eleven years old during this time. This is a record high number. However, now the National Automobile Dealers Association (NADA) is forecasting that 16.94 million new cars will be purchased or leased in the U.S. in 2015. This number is significantly higher than the number of cars that were bought in 2009 and the years following. The increase of purchase in vehicles show that Americans are becoming less wary of purchasing long-term, high risk goods and definitely points toward a bettering economic situation. Even the number of new households points to a better economic future. While the number of new households right now has been significantly lower these past few years due to children living at home longer to save up money because of the recent economic slump, this could be perceived as a positive in the long run. The housing market is back on the rise and has really increased since around 2011. This is because when these children living at home decide to look for houses, in the bettering housing market, they will be doing so in masses and; therefore, drastically improve the housing situation even more. Recent unemployment numbers show a steady decrease at 5.8 percent in October 2014. This number is one of many previous numbers that have continued to decrease each month for the past 5 years. The unemployment is slowly getting back to what it was before the recession in 2009. Also the BLS website shows an increase in the Consumer Price Index in 2013 shows an increase of 1.7 percent for the whole year. This is definitely something that will help America's economy to get up and going again, because it shows that people are starting to buy more goods, which means more money is going into the market system, which is what is needed to enhance the economy. All of these statistics point towards an ever-changing economic situation, which is changing for the better. My prediction is that in the next few years, the economic situation will be continued to slowly bring itself out of the recessionary years. Currently there are several causes of why our economy is doing better. Let’s look at Obama's economic