Last week, we talked about a report published by the census bureau reporting that in 2007, after adjusting for inflation, middle income Americans experienced the lowest income level since 1997.
Your assignment was to comment on the kind of impact that middle income Americans would likely have in the US economy going forward and how it will impact consumer spending which represents about 2/3 of the US economy.
In my opinion, the US is about to move from a market driven economy to a government driven economy. The numbers reported by the US Census Bureau revealed what many middle income Americans already knew, their disposable incomes are stagnant or declining. Furthermore, the inflation-adjusted value of their investments, both fixed and non-fixed, have declined over the last ten years forcing middle income Americans to cut back on spending. Second quarter GDP statistics reveal that personal consumption expenditures were down 1%, non-residential fixed expenditures were down 10.9%, and residential fixed expenditures were down 22.8%. At the same time, Government spending increased 11% during the second quarter. With unemployment approaching 10%, I expect to see this trend to continue. Government spending will likely increase as a component of GDP as consumer spending continues to decline. As a result, I would expect the government to continue to spend on economic stimulus programs to try to generate short term economic growth as measured by GDP, and in the process, it will become the decisive player determining economic growth in the US for the next few years.
Nevertheless, economic stimulus programs designed to influence GDP in the short term may not generate long term, sustainable economic growth. According to Federal Reserve Chairman, Ben Bernanke, the US recession is likely over but unemployment is expected to remain high at current levels through 2010.
How is it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months? Is it GDP alone a good measure of economic growth? Or is it unemployment and national disposable income growth a better measure of a country’s real economic growth?
Generally recession is considered over when a country start to experience economic growth and this situation is represented by an increase in GDP. However, an article by TradingEconomics.com states that GDP does not take into account factors such as education, health, distribution of income, pollution consequent, and values of activities outside of market place; portraying a rather inaccurate picture of current economic situation. The article also mentioned that the flaws of GDP may be important when studying public policy, however, for the purposes of economic growth in the long run it tends to be a very good indicator. As such I believe that the GDP alongside these factors including unemployment, and national disposal income growth would better measure the real economic growth of a country.
How is it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months? Is it GDP alone a good measure of economic growth? Or is it unemployment and national disposal income growth a better measure of a country’s real economic growth?
A recession can be over before we truly begin to see enough economic growth to begin rehiring people that have been laid off or hiring replacements. Businesses may not trust that our economy is stabilizing or may not see enough growth within their production to begin rehiring. GDP may measure a lot of things, but it cannot take into account every dollar that it could; we would be trying to figure out the numbers for months before we could get a fairly accurate read if we did account for every dollar. I think that when retailers like florists that have a truly disposable product (you don’t HAVE to buy flowers, but you should) start to see things begin to return to normal and the majority of businesses like this see turn around, then we can begin to breathe that sigh of relief and return to normal. For a recession to truly be over, we have to see the growth in all of our lives and trust it.
During the recession many businesses went bankrupt, although many weak businesses failed the recession caused many to start there own businesses. People created ebay stores, owned franchises etc. I do not think that GDP alone is a good measure of a country’s economy because it does not measure all these alternative businesses going on. I feel that eventually these start up businesses will grow and help some of the people who have been laid off.
Generally, a recession slows economic activity. Considering macroeconomics into the recession, areas involving production, GDP, employment, government spending, and business profits are mostly effected within a recession. According to an article on freep.com, “a recession is more than just charts and graphs. For most Americans, there’s nothing technical about a recession.” Thus, though businesses and the government are seeing slight increases from comparisons to old charts, companies are just coming out of their debts. If companies start hiring more employees for more jobs and expanding their business to its original status (before the recession), there is no certainty that the economy would not crash shortly after. In other words, to stay as far away from bankruptcy as possible, companies are taking “baby steps” towards their expansion.
Middle class spending and discretionary incomes are a more accurate description of the economy’s economic growth. Companies’ can keep a sustainable income and only invest when necessary. A discretionary income from consumer can be more accurate due to wants vs. needs. Companies spend/invest for practical reasons, while a consumer can spend for personal, less wise, desires on a “wanting” level. Rational spending can accurately describe the public sector for economic growth.
Unemployment and national disposal income growth are a much better measure of a country’s real economic growth. According to data from the US Commerce Department, August sales have shown an increase over July sales but are still down from the same time last year. The largest increase in the past months was in auto sales but that was due mostly to cash for clunkers, which was yet another automakers bailout. As long as people are still being laid off, unemployment keeps rising, and people don’t have money to dispose of, then we will never get back to where sales used to be. This is why we should not only base economic growth off of GDP alone, but incorporate national unemployment levels as well as the national disposal income levels of the middle and lower income families to get a better idea of the country’s real economic growth.
I believe that unemployment remains at the high level that it is at, even 12 to 18 months after the recession is said to have ended, because there are not many new businesses or jobs being created by the government. The recession had forced many businesses to close down and they have still not had the resources available to reopen. I believe that our country’s Gross Domestic Product is not a good indicator of our country’s economic growth, because we remain on the top of the GDP producers in the world, but as our unemployment rate shows, economic growth is slow.
According to the GDP business will start growing and people will start to get more job opportunities, but how? with the money that the US government is spending taken from our futures and other countries. GDP measures the economy by the final goods produced during a certain period of time. I believe is the best method to measure a country’s economy because it gives you statistics and the demand for final goods. According to the GDP the growth has gotten smaller during these past years, but it seems that it’s taking a different directions with the creation of more work places and more new implementation plans. According to Obama’s last speech he said “the GDP revealed that the recession we faced when I took office was even deeper than anyone thought at the time. It told us how close we were to the edge.” I think that while we have so much unemployment and so many debts we won’t see a recovery any time soon.
The GDP is a measure of a country’s economic performance and is the market value of all final goods and services made within country in a year. To me that is not the better measure of the country’s economic growth, the better measure would be the unemployment rate and national disposable income. The reasons that I say this are, unemployment means that the government is paying people a certain percentage, depending on how much they worked and how much they made, to not work when if these people were working they would most likely be making more money than unemployment pays them and more people would have jobs. This would create more consumer spending and less money being fed out to people by the government. The money that is given for unemployment barely gets some people by with food and gas let alone other expenses. People would be more reluctant to spend money when they know that they have a check every week for their hard work and have a job to fall back on. The GDP gives you the statistics and the demand for final goods but if there were more people to spend money on final goods instead of being unemployed you would see a complete change for the best in the GDP statistics and demand for goods. I do not believe that we have overcome the recession until the unemployment rates drop dramatically. This is why i believe that unemployment and national disposable income is a better way to measure the economic growth of a country.
At this particular time, I think GDP can tell us little about our countries economic growth due to stimulus, hyperinflation, and the debasement of the dollar. According to the Wallstreet Journal, “With American records in money-printing ($1.2 trillion conjured in the past 12 months), the Fed is putting the value of the dollar at risk.” With such inflation, is not recovering from a recession, but rather IN a recession, and so I believe that the GDP should not be used as measuring growth. James Grant in a Wallstreet Journal editorial says, “This time out, the fiscal stimulus is likely to measure 10% of GDP, monetary stimulus 9.5% of GDP, for a combined pick-me-up equivalent to 19.5% of GDP.” This represents unprecedented stimulus, introducing a wild card into attempts at forecasting the economy and or economic growth.
When a country is not in a recession the economy would be growing, and not have a 10% rate of unemployment. Daily finance has reported that the recession is not quite over. There has been 6.5 million jobs lost since December 2007, and the number still suggest many joblosses. According to an article on the web gdp will no longer be an accurate measure of economic performance. “A lot of economic analysts have been criticizing the GDP as an incorrect measure of the economy for a long time because it doesn’t not measure the standard of living and does not include the disparity in incomes between the rich and poor into account and ignores externalities such as damage to the environment”(EU observer). The article also states that gdp only takes into account what people’s salaries are for the year or the amount of money that they have spent. According to these articles on the web gdp is not a good measure on the economic growth, unemployment and national disposal income growth would be better measure of a country’s economic growth.
Nothing alone is a good measure of economic growth in the U.S. In an article in the New York Times, titled, “G.D.P. Seen as Inadequate Measure of Economic Health,” U.S. Census data showed that over the years 2000-8, America’s median household income fell about 4 percent, while at the same time, the GDP was rising. When looking at the formula to compute GDP (GDP=C+I+G+(X-M)) while C, (private consumption) has decreased, like you said G (government spending) has increased, which would cause a rise in the GDP. In the same New York Times article, Enrico Giovannini, the chairman of the Italian national statistics agency said, ““There isn’t a single indicator that can encompass everything…It’s not a question of replacing G.D.P. It’s a question of complementing it with other indicators that can provide other measures of well-being.” As we approach a ever advancing environment, the old Keynsian way of economics has to evolve with it in order to successfully measure economic growth, showing that not one thing alone is a good measure of economic growth.
How is it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months? Is it GDP alone a good measure of economic growth? Or is it unemployment and national disposal income growth a better measure of a country’s real economic growth?
I believe even with the GDP increase that is still not enough to say that a recession is over. The unemployment is going to remain at a 10% rate even after the 12 to 18 months because there are no job opportunities or businesses being created by the government. An article by Harry Moroz states “We forget or, in the pursuit of simplicity simply ignore, the complexity of the economic and social problems that surround us. We persist with a poverty measure that is grossly outdated, with Pell Grants for low-income students that are not pegged to inflation, with an unemployment rate that last month was either 9.6% or 16.5%.” I think the economy cant just base an upcoming from a recession based on GDP. I think there is a lot more to be looked at and the unemployment and nation disposal income growth a better measure of a countries real economic growth.
Unemployment can remain at about 10% even after 12 to 18 months due to many factors. One of which is caused by labor income being squeezed- meaning many businesses are cutting wages, benefits, and work hours since business owners are facing potential tax hikes. In prospective, if businesses can achieve great productivity with few workers, then many business owners will not be in a rush to employ more individuals in need of work. The most important signal of any recovery would be based on decreasing unemployment and increasing employment. So in the meantime we should still continue to stay alert and brace ourselves for what’s up ahead.
GDP is a good source to find out about the growth of country but to know where the country is heading towards it is also important to have the results from the national disposal income growth. It will take some time to the business to be stable again to order to hire people and produce more jobs. In the article from New York and Times, Mr. Stiglitz noticed that U.S. Census data showed that over the years 2000-8, America’s median household income fell about 4 percent. But over the same time the number on which the media and government were focused was rising on GDP. This tells that even the GDP showed that income was rising but on the other hand it was felling down. I think it will be a better idea to use other sources as well as GDP to find out about the economic growth of country.
GDP is not the only way for a country to measure their economic growth. Because GDP is the total value of all goods, services, agricultural produce and minerals extracted in a country or area, usually in one year. In GDP’s definition it doesn’t mention anything about the country’s unemployment rate. Therefore GDP can’t be the only way of measuring a country economic growth. It takes more than one source of information to decide a country’s economic growth. Maybe if the country takes into count additional factors such as the GDP, the country’s unemployment rate and national disposal income growth, they would have a better idea on where the country stands economically.
when you look at the progress made in our GDP it is easy to think that we will be out of this recession soon. But, GDP is not the only thing you should look at. Many Americans have never even thought to look at things like GDP they look at things like unemployment rates. it is tough to say things are going to get better when unemployment continues to get closer to that 10% level which is scary. What i am saying is i think it is wrong to determine a countries economic growth by using one statistic. things like unemployment rates and national disposal income are with out a doubt going to give you better readings on how this nation is doing. all in all GDP is simply not enough to determine whether or not we have come out of our current recession
Even though the GDP is the ultimate benchmark that measures the US multimillion dollars national economy, this factor alone would not correct the current recession. Unemployment rate from 10% will ultimately have to be reduce from the status quo before the ordinary American will start feeling the impact of economy growth from the recession. When the consumers start spending again like it use to be in the 90s then one would think that the recession is over or the US economy is on it way to recovery.
the GDP is gross domestic product is equal to the market value of goods and services produced by labor and property in the United States. GDP is not the only thing you should look at. Many Americans have never even thought to look at things like GDP they look at things like unemployment rates. Right now the unemployment rates is almost 10 %. Government should act now before it’s too late. Lots of people are without job right now.Therefore GDP can’t be the only way of measuring a country economic growth. It takes more than one source of information to decide a country’s economic growth. unemployment and national disposal income growth would be better measure of a country’s economic growth.
Gross Domestic Product is a basic measure of a country’s economic performance and is the market value of all final goods and services made within the borders of a nation in a year. While this is a valuable tool in considering the growth of a country, it can’t be depended on to accurately tell the health of a countries economic status. On the other hand, National Disposable Income is also a very valuable tool when measuring an economy’s health, because it is showing how much money a country has “left over” after government spending. Unemployment is approximately 9.6 %, and economists say it is likely to hit double digits. However, according to Okun’s Law, for every 3% GDP falls relative to potential GDP, unemployment rises 1%, (wikipedia.org) that being said there is a connection between unemployment rates and the health of a country’s economy. But I would not depend on unemployment rates alone to gauge the economy’s status.
GDP Gross Domestic Product is a means of meassuring what our country did economically that phiscal year. it portrayes the final price of a product
in the market. It can also tell whats items where bought more and wich one did not sell as well comparing them. the GDP can also tell what people were not buying buy comparing them to a previous index. over all it can tell you pretty much where the consumer money is going what items are being bought more.
I do not agree with the statement made by Ben Bernanke who claims that the recession is likely over. Although I believe we have seen the worst of it, I don’t expect to see any significant improvements in the near future. Since unemployment levels have not declined, gross domestic product has decreased, and government spending has risen, we are still going to be facing the same problems in the economy. It is not only one of these issues that need to be solved in order to turn this situation around, but all of the forementioned. With 10% of Americans still unemployed, consumer spending will remain low. With the government spending at a higher percentage than consumers and private investors, more debt will be acquired. By reviewing these facts I am lead to believe that the fate of the economy does not rely soley on the unemployment rate, GDP, or national disposal income alone, but improvement in all areas is necessary to get out of the recession.
GDP is used to help determine how a countires economy is doing. I believe that the GDP and the unemployment rate are closely intertwined; because changes in the overall economy arise from the decision of many individuals. GDP is measured by the countries income in a year or by consumer spending in a year. If both areas are studied we can easily see that after 12 – 18 months of a “recession turn around” there is not going to be much of a differenece unless the unemployment rate goes up. It does not look like unemployment rates are going to be going up any time soon. According to kmvt.com, the government is willing to extend unemployment benefits to cities whos unemployment rate is at leat 8.5 percent. Meaning that they do not see the situation improving any time soon. Businesses need to give people jobs in order for them to spend money and improve the recessions current status.
Is the recession over? It depends on how the individual identifies a recession. Some would say yes, this writer says no. Most economists identify a recession by a fall in GDP for at least two quarters and that the recession is over when the GDP begins to rise. By this definition, yes, we are out of the recession. There is one problem with this method of determination, GDP is currently rising but so is unemployment. Granted unemployment is historically the last factor to recover from a recession but it’s wrong to say that this recession is over when we haven’t surpassed the last obstacle. Some economists prefer to determine a recession with a 1.5% rise in unemployment and that the recession is over when those numbers start to fall, this is the method we should use and this is why we are still in a recession.
GDP can tell us alot of our economic growth but i wouldn’t realy just upon that, that is a small part of a bigger picture. GDP is a basic measure of economic proformance, and market value of goods. GDP tells us how we are preforming but not how many of us are employed. It will tell us the fundamental measurement of production, but thats is not how people measure our economies growth. It may be good that our economy is preforming well, but the people see 10% of the american work force unemployed. Seeing that, my opnion would be that our economic growth should not be measured in just GDP.
How is it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months? According to the Wall Street Journal the new requirement for all companies in the U.S. not to make any drastic budget decisions until the beginning of September; also, to help employment the government has invested $35 billion in highway pavement, and $18 billion worth of projects.
Is it GDP alone a good measure of economic growth? Or is it unemployment and national disposal income growth a better measure of a country’s real economic growth? In my opinion after reading Freep.com its better for national disposal income growth and unemployment is the best thing because, the GDP may have fallen but people have learned to save so they don’t fall into dept.
In my opinion, I don’t believe GDP alone is a good way to decide that the recession is over. People are still struggling to get a job, and pay there bills. Peter S.Goodman wrote in the NYTimes, “In a provocative new study, a pair of Nobel prize-winning economists, Joseph E. Stiglitz and Amartya Sen, urge the adoption of new assessment tools that incorporate a broader concern for human welfare than just economic growth. According to the report, much of the world has long been ruled by an unhealthy fixation on swelling the gross domestic product, or the quantity of goods and services the economy produces. With a singular obsession on making G.D.P. bigger, many societies — not least, the United States — failed to factor in the social costs of joblessness and the public health impacts of environmental degradation.”
The government needs to take a step back and really think about what’s going on here. Reality is 10% of Americans are unemployed. Is that 10% really trying to get a job, or are they using the recession as an excuse to collect unemployment? I honestly think maybe half of them were laid off, the other half really don’t care. As we all know, many people stopped shopping. Some retail stores raised there prices, while other retail stores have sales constantly just to bring business in. Regardless of sales and incentives people are afraid to go out and spend there money. Even restaurants have fewer customers. The reason it will not get better any time soon is simple, people are not going to buy the things they want, only what they need. Business will continue to suffer, and we will start to see the 10% of unemployment decrease even more by 2010. On the contrary, this recession could be a great opportunity for many of us. People will learn how to control their money more. They will only purchase their necessities, which is why I believe that someday, maybe not tomorrow, but someday we will not only become a stronger nation, but we will have a better understanding of what it’s like to have next to nothing.
In my opinion, GDP is not a good indicator in how our Economy is doing, it is not to accurate. The down fall of the GDP according to tradingeconomics.com it does not consider anything outside the market place such as health, and education. The GDP says that the services of labor and property located in the US decreases by annual rate of 1.0 percent, from the first quarter to the second quarter of 2009. In my opinion not until the unemployment rate drops, we will still be in a recession. The US has the highest unemployment rate in the world sitting at 9.7 percent, april of 2000 the unemployment rate was only 4 percent, that means it more than doubled since then, I feel like many businesses are feeling the pressure of the recession and so in affect they’re cutting wages, benefits, hours and workers.
What can the GDP tell us about the economy? GDP is an educator of the world and it’s aggregate measures of total economic production for the country. GDP represents market value of all good and services produced by an economy, during the period measured. Including personal consumption, government purchases, private inventories, paid on construction costs and the foreign trade balance. Exports are added and Imports are subtracted. The GDP is extremely comprehensive and detailed. GDP incorporates retail sales, personal consumption and whole sale inventories and are all used to help calculate gross domestic product. The GDP is considered the broadest indicator of an economic out port and growth. Real GDP takes into account, allowing for comparisons against other historical time periods. The bureau of economic analysis issues its own analysis document with each GDP release, which is a great tool for analyzing figures and trends and reading highlights, of the very lengthy full release. Yet, data is not very timely. It is only released quarterly. Revisions can change historically just a .5 GDP growth is a big change. While quarter to quarter figures can show some volatility long term trends in GDP remains the single most conclusive piece of information on the economy as a whole. This indicator is a must know for investors in all asset classes.
I believe that even though the recession is over unemployment is still at 10% because of time, I believe it takes time for the companies that made layoffs to actually see an increase in revenue enough to re-hire. GDP is not good enough to measure economic growth because it focuses on the domestically produced products and the income that comes from it, but unlike CPI it doesn’t measure those purchased by households/ family’s, and goods purchased by households is what makes up 2/3 of the US economy. So I believe that measurement of unemployment and consumer spending plays a major role in the measurement of the economies growth.
How is it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months? Is it GDP alone a good measure of economic growth? Or is it unemployment and national disposal income growth a better measure of a country’s real economic growth?
The effects of the recession will take time to wear off even if the GDP says that it is over yet the GDP isn’t a good measure of economic health. Many studies, like the one done by Nobel prize-winning economists, Joseph E. Stiglitz and Amartya Sen, are saying that the GDP only measures the flow of money but not the well-being of the people involved and are therefore nearly obsolete. Many people including President Nicolas Sarkozy of France have suggested a new way of measurement that includes how people spend, what they are forced to waste (such as gas during a traffic jam), and also the unemployment rate. In the 1930’s the GDP was the “most important advancement in macroeconomics” but it’s probably time to upgrade it. The GDP held its own for a good while but there is room for imporvement”The old mode of measurement has taken a beating, and yet the new one, it seems, is still a work in progress.”
The recession is a hard thing to messure, it all has to do with the way you look at the numbers. With the unemployment numbers as high as they are and people still getting layed off i dont believe that the recession is over. The idea that measuring the economy with just the numbers from the GDP does not seem very realistic, the GDP “it is equal to the sum of the income generated by production in the country in the period—that is, compensation of employees, taxes on production and imports less subsidies, and gross operating surplus (or profits).”(wikipedia-GDP) I beleive that the economies growth needs to be measure by the unemployment rate and the spending by the people not just the revenue of the big companies and the bail out of the goverment. In conclusion i dont beleive the recession is over due to the high numbers of unemployment and the lack of spending by americans.
Although Federal Reserve Chairman, Ben Bernanke believes that the recession is over, which i disagree, it still hasn’t help unemployment rate. Yes it is improving slowly but unemployment is still a huge problem. According to the Wall Street Journal GDP did went from -6.4% to -1% but when you look at the unemployment it was from 7.2 to 9.4. We can’t just judge on GDP to measure the economic growth, we have to look at unemployment too. GDP is only based on goods and taxes which doesn’t help us see that recession will be over soon. To fix this problem they must hire everyone back. If unemployment is less of a problem, recession will be over. So I believe the recession is not over until the unemployment percentage goes down.
Literally; the recession might be over just based on GDP. However, unemployment will continue to rise at this instance. I believe that GDP is not the only element to measure economic growth. Unemployment should be also consider as a factor. According to the President of the U.S Barack Obama; it’s likely to show we’re still continuing to lose far too many jobs,” he predicted. “As far as I’m concerned, we won’t have a recovery as long as we keep losing jobs. But history does show you need to have economic growth before you have job growth.” Furthermore; The president also said the GDP numbers indicated “that eventually businesses will start growing and will start hiring again. And that’s when it will truly feel like a recovery to the American people.” For all this reasons i believe that Unemployment plays a big a factor as well as GDP for economy growth and as long as GDP and Employment opportunity increase at the same rate.
I think GDP obviously is a great indicator of economic growth, but just because GDP is going up doesn’t mean that the unemployment rate is going to get better. According to the Washington Post 2009 gross domestic product was raised by about 1 percent, which has a positive rather than negative effect on the economy. But with the improvement made by the stimulus program, there are still concerned that employers are too scared to hire workers back. Little improvement has been made since August with the unemployment rate still at 9.4 percent. The Labor Department also said in the article that another 570,000 people filed new claims for unemployment last week. By the look of it, the unemployment rate is only going to get worse before it gets better because employers still do not fully trust the economy.
Even though the recession can be over, unemployment can still remain at about 10% even after 12 to 18 months. Reason being is because during the recession many business closed down and many people lost there jobs. The government is not yet ready to take the risk and open up more businesses. I believe that the GDP is a good way to measure the economic growth. The GDP will tell you how much product the United States is making. The more products the United States is making the better the economy gets because the more jobs those companies making and selling the product have to give out which lowers the unemployment percent. Hopefully in a couple of years we can raise our GDP which will lower our unemployment percent.
First of all, I believe the recession was never over to begin with. It’s all about marketing certain information out to the public. Yes, I’m certain that GDP is using collected statistical data from a specific group of consumers still buying big purchases. Since May, when stock was considerably low, the stock was only up at a fraction in the green zone around mid-August now the recession is “over”? Please spare the nonsense. With people still losing careers, on top of finding jobs, and trying to keep their homes I don’t see any significant sign of recovery just because the stocks have a slight positive yield. I expect the same actions from the media and major companies to keep painting the picture in people’s minds that the recession is “officially” over, because the way I see it, it’s a marketing trap for consumers to start spending what they don’t have.
It is very possible to have high unemployment rates 12 to 18 months after a recession is said to be over. Many businesses had to lay off workers in order to keep their companies balanced. My fathers business went from 15 employees down to 9 at the beginning of the recession and although his business is now doing better, hiring those workers back would cause a loss of money. This being a reason why GDP is not the best way to measure economic growth. According to the U.S. Census bureau, data showed that over the years 2000 to 2008, America’s median household income fell about 4 percent. But over the same period, he said, G.D.P. — the number on which the media and government were focused — was rising. Only being focused on the GDP leaves out other key subjects that indicate recessions. I believe that if we used the human development index, like the UN, which incorporates G.D.P. as only one of a number of criteria, we would see much more development.
How is it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months? Is it GDP alone a good measure of economic growth? Or is it unemployment and national disposal income growth a better measure of a country’s real economic growth?
Since this recession has been widdling its way out, three of my friends in the past two weeks have receiev good paying jobs for a young adult. So the unemployment thing thats going I think has to due with high paying jobs such as executive jobs. There are jobs out there, just ot the jobs people go to school for and expect to make bucko bucks their first year. I dont think GDP alone is a good mearue of economic growth because during this time people have been saving more than spending but that doesnt mean their broke or not making money. Ive stopped going out to eat every night and i save like $150 dollars a week plus Im making money.It effects the restuarant industry from my business but when i save a lot of money I can use it for something bigger such as a car or a pool. That doesnt mean Im broke but it means Im actually saving my money making my checkings and savings go up.
In my opinion, there are many different ways into measuring the country’s economy. By this method and that method, this variable and that. Theres no way to tell the future of the economy becuase everyday is a new day.
Even after 12 to 18 months of the recession being over it is possible for unemployment rates to still be high because the people who are on unemployment are having a tough time trying to find jobs. Even though the GDP is up it does not necessarily mean unemployment rate will decrease. One reson for this is with the GDP increasing that means that business’ are getting back on their feet and are starting to get more business. This does not mean that they are doing as good as they once were although some business that might not be the case. With the Gdp rising and unemployment staying high it tells us that slowly but surely companies are doing better but not as good as they once were doing when they could afford to have more workers. If this gradual increase in GDP i sconstant then you will start to see unemployment rates drop do to more business oppurtunity.
It is possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months. According to what President Barrack Obama stated to the CNN’s “state of the Union” program, the signs are all positive towards the economy growing. The only thing he was unsure about was that the unemployment rate might worsen. In my opinion, GDP is not a good measure of economic growth. It would be better to include the unemployment and national disposal income growth to determine the economy’s recovery. It seems that the President included that but at the same time he stated that the economy is recovering. This led me to believe that unemployment and national disposal income growth is a better source to distinguish the economy and its getting better or getting worse.
How is it possible that a recession can be over and unemployment can remain at about 10%even after 12 to 18 months.the question is,is GDP alone a good measure of economic growth?or is it unemployment and national disposal income growth a better measure of a country’s real economic growth.
First and foremost.GDP i believe is the measure of a country’s economy growth and to know how a country has grown in year.According to Ben bernanke,once recession is over unemployment is said to remain high at current level till 2010 which simply means less money for people to go out spending when they know they have no jobs to fall back on.Unemployment is said to help those who lost their jobs so they could have something at least to fall back on,so i personally do tink these individuals will have such a tight budget cause they really do have less to spend cause they have just a little coming in every week to sustain them.So i think it is unheard of to put an economy’s fate on only unemployment rate but also consider GDP as well
A recession is two quarters of negative GDP growth, it will take time for the nations economy to recover, at the moment it just stabilized. Unemployment can still remain high while the GDP increases because each measure a different aspect of our economy. The GDP is a good base statistic but you can’t just tell how the economy is doing on the GDP alone. The most accurate to tell how a country is doing is to look at both the unemployment and the GDP. It seems to me like the GDP offers a short term look at the economy while unemployment measures the economy long term. I think that it will be some time before the unemployment starts to drop.
To measure the reccession there is two ways, one is to measure the GDP rate and the other one is to measure the unemployment rate and national disposal income growth. The GDP and unemployment rate are not depended on each other. It is possible to get over the recession and still have an 10% of an unemployment rate for the next 12 or 18 months. GDP tells us about the total goods as a whole produced in the country. And the Unemployment rate tells us about the percentage of jobless and unemployed people. The national disposal income tells you about how much goods are diposed nationally. I think that the GDP is more accurate way to measure the economy than the unemployment rate because it not only tells us about the goods produced but also the demand of the consumers. The WSJ posted the GDP rate for the 2nd quarter of 2009, which is -0.5%. In 1st Q of 2009 it was -6.3%, which means we are better off now than we were in 1st Q. By measuring GDP one can tell if the consumer spending is higher than lower. And if the consumer spending is higher the economy will get better. So for now the consumer spending is higher, since WSJ posted that we went up +5.8%.
It is very possible for unemployment to be high only after 12-18 months of the recession being over. According to the New York Times, “the unemployment rate sits at 9.7 percent and will probably climb higher and remain elevated for many months.” We can’t measure economic growth on GDP alone. We need to take in account the unemployment rate. Businesses just aren’t hiring right now. It’s very hard for people to find jobs and without jobs people lack an income. These people aren’t spending. They’re saving. There are many ways to measure an economy, but basing it off of one process will not give you an accurate result. That’s why I believe it is possible for the unemployment rate to stay so high after a recession.
GDP though to be the best measure of the US ecomomy, but to my opinion this is not the best sysem to measure and tell how the majority of the population is peforming during and after a recesion or at any given time, why very symple.
In other words the US economy as measured by the GDP is everything produced by all the people and all the company in US, so is the GDP really watching how the average US citizen is meeting ends meet?.
If the GDP measures averything produced by all the people how can a recesion be over if the average middle income american are loosing their jobs, their homes, and their hopes.
To my understanding when a company laids off employees it is because it is not producing enough to sustain wages therfore the measurement of the GDP has to show that we are still in recesion because we are producing less,and as consequence spending less.
In resume and to my opinion the GDP is just important for three reasons,
it can be use to determine if the US econonomy is growing more quickly or more slowly, it can be use to compare the size of economy throughout the world, and the relative growth rate of ecomomies throughout the world. I believe that the effects of inflation are being taken out under this measurements, current -dollar GDP is the measurement that leaves inflation in the estimate. It is therfore much higher than the real GDP
According to the Federal Reserve Chairman, Ben Bernanke, the US recession is likely over. I believe this to be false, due to the unemployment rate being at about 10% and will stay high for more than a year. GDP is not the best way to measure our economy’s growth alone nor is national disposal income growth. However, if we measure both of them together, it will help determine the country’s real economic growth. GDP alone does help determine how much product the US has produced, to some degree. National disposal income equals the gross national income which represents the total primary income receivable. Although, I don’t believe it is able to determine the US economy’s growth alone.
The recession can be over for the fact that government is actually spending more money then they have ever spent before which cause companies not wanting to hire and makes the unemployment rate be close to 10%. The GDP measures a country’s economic performance and is the market value of all final goods and services made within country in a year. The US is expected to save more money then actually spending it. Middle class Americans are hardly getting an income due to the fact of unemployment . We cannot depend on GDP alone because the unemployment rate will not increase but instead increase and involves the income of unemployed people that will save money not spend money.
I feel like the US can come out of a recession with the unemployment rate still around 10 percent because the companies that are still running have just increased their sales with the lower amount of employees but it shall take them the 12-18 months to recover enough to re-hire more employees. The GDP is considered the broadest indicator of an economic out port and growth. The percentage of unemployment should be taken more deeply into consideration of determining a recession because when some of the general public hear the word “recession,” some panic and change their spending when they do not need to. That hurts the economy furthermore. I think there is more to be seen and that the unemployment and nation disposal income growth will contribute to a better measure of a countries real economic growth.
When talking about a recession we really don’t know the start date until we are well into it, and we don’t know the end date till it’s already past. GDP alone is not a good measure of economic growth because it leaves out so many factors such as unemployment rates and the national disposal income growth. Furthermore, if you focused on unemployment rates and the national disposal income growth only it would also be incomplete. Therefore the best measure of a countries real economic growth would be better calculated by measuring all of these attributing factors.
In the US we use GDP to determine the countries economic growth. In my opinion, GDP should not be only way we determine our economic growth.Unemployment rate is almost at 10% which shows we are still struggling economically .Even tho Federal Reserve Chairman, Ben Bernanke seems to believe the recession is bound to be over but our unemployment rate is rising,there have been 6.5 job lost since December 2007.So the GDP should not be the only way we determine our economy.