The Performance of the U.S. Economy Today - Essay Example

The main reason for the slow economic growth of the economy is lack of responsibility and initiatives taken by the government in reducing the expenditure. While considering the GDP rate of the country it is experienced that the overall economy should be rated as B grade. The rate of GDP decreased during the first quarter, it decreased to 0.2 and then it recovered in the second and the third quarter. The decrease in the oil prices facilitated the people to spend more which mainly accounts for two third of the gross domestic product.

The government took initiatives in raising the GDP of the economy by reducing the total government spending which includes local, state and federal expenditure. The spending decreased from 39% to 35%.The decline in government spending led to the increase in GDP. The main reason behind grading the economy as B is that the economy is not performing effectively and efficiently, the corporations and the owners of the company or the businessman have become greedy, cautious and myopic. The investors instead of holding the cash for future they are engaged in hoarding the cash and utilizing the cash for short term profitability (Collins, 2015).

The export and import function of the economy did not prosper. After the recovery of the financial crisis it is observed that the changes in case of both export and import are comparatively less. This resulted in the increase of trade deficit. The FED justified and explained that the labor and the market condition of the economy are improving as compared to the previous years. Although the number of investors increased during the period of recession but the amount of investment by the investors are decreasing with the due course of time.

Therefore the level of investment failed to contribute towards the growth of the economy. The consumer spending is mainly measured in