Economic Outlook for American Families by Michael Sivy - Essay Example

Now that debt-ceiling debates slow down and the fiscal cliff fight is over, it is a good time to evaluate the economic outlook and its means to Americans. The United States has enjoyed more than three years of declining unemployment and continuous economic growth since the end of the recession. Yet, it is considered as the weakest rebound since WW-II. Economic growth is as low as 2.25% and unemployment is still higher than where it should be by this time. To see what it means to Americans, a closer look at a few important factors is taken.

Unemployment has been steadily coming down for the past three years. A recent report showed that around 155,000 jobs were added in December in order to handle the unemployment situation in the U.S economy. However, the rate of unemployment remains unchanged and stood at 7.8%. Faster job creation is required that is around 300,000 or more in order to bring the rate of unemployment to the desired level.

Policymakers are enjoying sweet repose as annual inflation stays at a satisfactory level. Over the past 12 months, only an increase of 1.8% has been seen in consumer prices. When it comes to Household Debt, it has been observed that credit card debt has declined to 16.5% and consumers remain cautious. It will enable Americans to spend a little, as the economy gets better. Despite it, certain types of debt are still rising such as student loans. Fresh graduates are not being able to find well-paying jobs.

Prices of Homes continue to move up as a market condition of real estate improves. As unemployment goes down, there is more chance of further improvement. As far as Gas Prices are concerned, although they fell last year, they have again started to back up. Gas prices rely on the cost of oil, which has increased to double after the recession has ended. As economic conditions get better, there would be an upsurge in the demand for oil, which will ultimately increase the prices of gas.

For Equity Markets, the combination of low inflation and slow growth is usually good for stocks. Forecasters seek adequate gains from blue-chip companies. Certainly, it will lead investors to continue to invest in stocks.

Critical Analysis

In this article, the author has mentioned the impact of post-recession economic conditions on American families. Several areas have been highlighted in order to provide brief insight of how this area affects American families. In this article the author states that the economic condition in the United States has been improving for the past 3 years yet, it does not stand at the point where it should be. I believe that this point is not valid because the economy of the United States experienced the worst recession in 2008. Usually, after the recession, the economy gets stabilize but in this case, it was referred to as a Double-Dip Recession. It means that after the initial recession, there was very slow recovery, which was followed by another recession. Analysts predicted that there is the threat of the United States getting bankrupt. If it happens then it will drown many other economies with itself. Therefore, after all, such chaos, even if the economy is heading towards improvement then it must not be criticized.

Despite discussing all the integral components of an economy, the author showed the least linkage of these factors with American families and their influence on them. Brief information was given on the concluding note that outlook is encouraging for people to have stable housing, good credit, and secure jobs.