Essay on Swot: Inflation and Labor Statistics

Submitted By mesquerre
Words: 1995
Pages: 8

Economic Trends

1. GDP Trends:

GDP in the U.S. increased by 2.2 percent in 2012, compared with the increase of 1.8 in 2011. Personal Consumption, Investment, Government spending, and Net Exports calculate GDP. This increased was reflected due to the increase in personal consumption. Another factor that made the GDP increased in 2012 was the decrease in imports, and government spending ("National income and," 2013).

2. Inflation Rates

Inflation affects any industry because it causes the prices to increase. According to the Bureau of Labor Statistics, the inflation rate which is calculated by the all items index increased by 1.7 percent over the last 12 months (Fontes, 2013).

3. Interest Rates

The interest rate in the United States averaged 6.18 percent from 1971 to 2013. The interest rate is decisions are determined by Board of Governors of the Federal Reserve and the Federal Open Market Committee. Lower interest rates has a positive impact on consumers, because it makes it easier for consumers to borrow money, spend less on interest costs, and spend more money on goods and services (Fontes, 2013).

4. Economic Growth

Economic growth has a huge impact on the economy. If the economy is growing, which is measured by the GDP, demand for goods and services increases as well.

5. Foreign Exchange Rates

Foreign exchange rates are important to consider for an organization. Nowadays, many companies operate globally, which means that it may have its headquarters offices located in one country, but has operations worldwide. Therefore, a profit earned in a foreign country may result in a loss due to unfavorable exchange rates.

6. Availability of Credit

Credit may have a double impact on the economy. If credit is handled correctly and responsibly, it has a positive outcome. There is an increase in economic growth since it encourages businesses to invest. On the other hand, it may have the opposite impact too..
7. Migration to Urban Areas

8. Energy Availability and Costs

9. Unemployment Level

Persons that have actively looked for a job in the past four weeks, and did not found one are classified as unemployed. Persons that have been temporarily laid off are also classified as unemployed. According to the Bureau of Labor Statistics, the unemployment rate, which represents the number of unemployed as a percent in the labor force, went down to 7.7 percent by November 2012 compared to the 8.7 in 2011 ("Labor force statistics," 2013). Unemployment creates uncertainty in society because it means a loss of financial security. Regular expenditures done by family members must be reduced or in many cases stopped. The reason for that is that the disposable income of the family has been drastically reduced. This reduced in purchases includes expenditures such as food. Members in the family have a hard time metting basic needs.

Unemployment has an impact on every aspect. Issues related to housing also arise. Most of the time, families are forced to move to a different house because rent is not affordable anymore. Even worst, people are not able to continue paying for their mortgages and end up losing their properties.

Significant rise in health problems arise because of unhealthy nutritious food. This may cause diseases that the family may not be able to treat due to the poor financial situation.

(Kosta Sonkushre, 2011)

Loss of Financial Security
Unemployment of the earning member of the family suddenly brings a lot of changes in the lives of family members. Sudden loss of financial security creates a lot of tension and stress in the family. The regular expenditures done by the family members before, suddenly have to be reduced or stopped due to altered financial capacity. It becomes really difficult for every member to adjust to this change. Searching for alternative sources of income becomes a…