Thoughts on Economic Growth" both take a look back at events that happened in the past, and then a look forward into the concept of Productivity as it relates to economic growth. So, let's assess where we are right now...As we enter the last few weeks for this course, it seems like it couldn't have come at a better time. Chrysler & GM have emerged from bankruptcy, paid back their loans and along with Ford are making record profits and record sales (although GM has a big problem with the serious issue with the ignition turning off on cars that they failed to deal with for almost 10 years). The Dow Jones Industrial Average of the nation's top 30 stocks (often used as an economic indicator) closed at 17,770.90 yesterday (November 23) and was up over 160% from its 12-year closing low of 6,547.05 on March 9, 2009 (15 months into the Great Recession). The last few weeks, (November 1 through 23), the DJIA has been fluctuating between 17,000 - 17,800 as investors are by and large happy with the economy - especially consumer spending, consumer prices and the recent jobs reports, but mostly that corporate profits are way up! The Unemployment Rate is at 5.0% for October which is down over 5 full percentage points since October of 2009 when it was 10% (the highest of the Great Recession). The economy added another 271,000 jobs in October and going back to the start of the Great Recession in December of 2007, the economy has recovered all the jobs lost and then some, but at lower wages. Comparing back to a year ago the Unemployment Rate is down 0.8% from October of 2014. This is extremely good news - which tends to get downplayed by the media for some reason. Consumer Confidence is up as is Consumer Spending, and gas prices are lower than they have been for over 10 years, and they seem to be stable below $3.00 a gallon now. Still there is not any price instability as the overall inflation rate is still at 0.2% annually, which is well below the 3% mark where we start to worry about inflation. In fact, the CPI (Consumers Price Index) has not changed much over the last year. So maybe things are looking up, but oil prices are always iffy, but for now they are below $100 per barrel - which could mean lower heating and gas prices, especially as we move into the end of the fall season and the winter heating period, this might free up some more dollars for consumers to spend on other goods and services - especially during the holidays. But, if gas prices go up - it could slow down growth. GDP growth for the 3rd quarter of 2015 was at an annual rate of 2.1% and 2nd quarter data indicated we grew at a rate of 3.9%, which is very strong back to back quarters. The 3rd quarter number is .9% below our 3% annual growth goal, but still a very positive number, although we still need to string 3 or 4 quarters in a row like the second quarter. In housing, the number of foreclosures has been heading down and housing prices are on the rise with home sales starting to pick up very nicely. And to top it all off, we have the worries of the weather this winter (given what is happening right now, we need to wonder if we are in for another winter like last year?). Looking back over the summer we saw drought conditions in the south, west and in parts of the country we had flash flooding, mudslides and tornadoes throughout the west, east and midwest of the US. Congress passed a bill stopping student loan rates from going up - but is that the next bubble that is going to burst? What happens when all these loans have to be paid back, when those who took out the loans do not have enough income to pay for them? Congress and the President passed a Budget Bill for the first time in a very long while, but there is no doubt another battle looming over spending and taxes when that one gets close to expiring. National Security continues to be an issue and there is also potential for a fight about immigration both from Mexico and the issue with the Syrian Refugees. All of these things can affect the economy in one way or another. Finally, the FED seems poised to raise interest rates because with the economy at Full-Employment, the threat of inflation looms so we want to stop that before it gets started. So, in our last discussions, you will have a chance to speculate about where you think we are headed with our economy. Have fun, use what you know...and let's have a real discussion! Try to touch on all the aspects of our goals (Full-Employment (5% Unemployment Rate), Price Stability (3% Inflation Rate) & Economic Growth (3% Real GDP increase annually)) to predict where the US Economy is tracking. Make as educated a guess as possible to indicate where you think we are headed! And then explain your rationale for your predictions.
no word limit just need opinons and facts