Why Job Growth Is Like to Slow and Surprise Increase in Rates is Credited to Signs of Recovery - Literature review Example

The paper “Why Job Growth Is Like to Slow and Surprise Increase in Rates is Credited to Signs of Recovery" is a  pathetic example of a literature review on macro & microeconomics. The article "Why Job Growth Is Like to Slow" by Leonhardt analyses the current job growth situation in the US. It also gives a brief analysis of job growth within the past few months as well as predictions for job growth within a few months to come. The author reckons his dissatisfaction with the reliance by surveyors on job reports to predict economic growth. He postulates that growth domestic product could also be used to measure economic growth. He avers that a look at the gross domestic product reveals the anticipation of slow job growths in the coming months.

The author presents a profusion of data justifying a reduction in economic growth in the current quarter. This implies that there is slow job growth as compared with the preceding quarter. Various forecasters predict a slowed annual economic growth rate. Thus, this depicts slowed job growth in the coming months. All the figures predicted by major forecasters such as Barclays Capital, HIS Global Insight as well as Macroeconomic Advisers reveal a drastic fall in job growth.

In explaining the causes of the decrease in job growth, the author attributes it to three primary causes. The first is the warm winter which has pulled some spending forward reducing spending in the coming months. The second cause is the rising oil price whereas the third cause is the continued debt overhang that makes sustained recovery a nightmare.

This article incorporates a plethora of economic issues. However, the most eminent ones are supply and demand and business profits. The demand for jobs is highly contingent on the supply of jobs. Thus, a slow job growth depicts a reduced supply of jobs which limits the demand for jobs to the available jobs. Conversely, high job growth depicts an increased supply of jobs which leads to high demand for jobs.

With regard to business profits, it is apparent that economic growth means that business is making higher business profits and hence able to expand thus, employing more and more people. This eventually leads to higher job growth. On the other hand, a decrease in economic growth implies a decrease in business profits. This eventually limits the expansion prevalence of the business. Thus, no more jobs could be created hence a slowed job growth.

“Surprise Increase in Rates is credited to Signs of Recovery” By Nelson D. Schwartz

This article addresses the controversy surrounding the rise in the interest rates prior to the resuming of trading at the bond market. According to various strategists, the rise in interest rates does not imply any dangers to the economy as yet. They clear the uncertainty surrounding the escalated interest rates.

The author addresses the decision made by the Federal Reserve acknowledging the slight upturn in the economic conditions. They dismissed earlier warnings that the rates might be raised sooner in anticipation of the risk of inflation. The Federal Reserve, therefore, maintained that short-term rates were to be maintained to near zero through 2014.

Despite the fact that the rising bond yield undermines prices for stocks hence jeopardizing the economy with inflation, the Chief investment strategist for North Trust in Chicago held that there is no major threat to the economy currently.

Strategists attribute the increase in interest rates to the Federal Reserves’ statement acknowledging improved economic trends and the released results from stress tests performed by the Fed on banks earlier on. Strategists argue that the increased rates are likely to encourage corporate borrowers as well as home buyers to act now before the rates escalated further. There is a reassurance that the rates are bound to stay between 2.10 and 2.42 percent and no more increase should be expected.

This article also reveals a variety of economic concepts. However, this paper shall only be inclined to supply and demand, resource market as well as business profits. Supply and demand are analyzed in the context of the escalated interest rates. At this rate, the demand for loans and other financial borrowings is bound to increase. Consequently, the increase in demand for financial borrowings has a direct effect on the supply of the funds by the various financial institutions.

 Also, as a result of the reaffirmation that the rate to remain within the range of 2.10 and 2.42 percent, it is anticipated that corporate borrowing and home buying is bound to increase. This implies that banks and home sellers expect increased business profits. A resource market is a market used to exchange capital, labor and other natural resources. Thus, the bond market also represents a resource market.