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Economic Indicators - Essay Example

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Economic Indicators Economic Indicators The economic indicators allow for analysis of economic performance as well as predictions of future performance. The economic indicators includes indices like unemployment rate, gross domestic product, consumer price index, prices in the stock market and changes in the money supply (Moreland, 2013)…
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Economic Indicators Economic Indicators The economic indicators allow for analysis of economic performance as well as predictions of future performance. The economic indicators includes indices like unemployment rate, gross domestic product, consumer price index, prices in the stock market and changes in the money supply (Moreland, 2013).. Economic indicators are useful only when the researcher has the idea to interpret. There has been strong correlation between economic growth and profits of organizations. Data on economic indicators Unemployment rate: The following provides the data on unemployment rate of United States. The time period taken under consideration is 2002 to 2012. Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2002 5.7 5.7 5.7 5.9 5.8 5.8 5.8 5.7 5.7 5.7 5.9 6.0 2003 5.8 5.9 5.9 6.0 6.1 6.3 6.2 6.1 6.1 6.0 5.8 5.7 2004 5.7 5.6 5.8 5.6 5.6 5.6 5.5 5.4 5.4 5.5 5.4 5.4 2005 5.3 5.4 5.2 5.2 5.1 5.0 5.0 4.9 5.0 5.0 5.0 4.9 2006 4.7 4.8 4.7 4.7 4.6 4.6 4.7 4.7 4.5 4.4 4.5 4.4 2007 4.6 4.5 4.4 4.5 4.4 4.6 4.7 4.6 4.7 4.7 4.7 5.0 2008 5.0 4.9 5.1 5.0 5.4 5.6 5.8 6.1 6.1 6.5 6.8 7.3 2009 7.8 8.3 8.7 9.0 9.4 9.5 9.5 9.6 9.8 10.0 9.9 9.9 2010 9.8 9.8 9.9 9.9 9.6 9.4 9.5 9.5 9.5 9.5 9.8 9.3 2011 9.1 9.0 8.9 9.0 9.0 9.1 9.0 9.0 9.0 8.9 8.6 8.5 2012 8.3 8.3 8.2 8.1 8.2 8.2 8.2 8.1 7.8 7.9 7.8 7.8 Diagrammatically it can be represented as follows: (Bureau of labor Statistics, 2013). Consumer price index: The following provides the data on consumer price index for the same time period as above. Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2002 177.7 178.0 178.5 179.3 179.5 179.6 180.0 180.5 180.8 181.2 181.5 181.8 2003 182.6 183.6 183.9 183.2 182.9 183.1 183.7 184.5 185.1 184.9 185.0 185.5 2004 186.3 186.7 187.1 187.4 188.2 188.9 189.1 189.2 189.8 190.8 191.7 191.7 2005 191.6 192.4 193.1 193.7 193.6 193.7 194.9 196.1 198.8 199.1 198.1 198.1 2006 199.3 199.4 199.7 200.7 201.3 201.8 202.9 203.8 202.8 201.9 202.0 203.1 2007 203.4 204.2 205.3 205.9 206.8 207.2 207.6 207.7 208.5 209.2 210.8 211.4 2008 212.2 212.6 213.4 214.0 215.2 217.5 219.1 218.7 218.9 217.0 213.1 211.4 2009 212.0 212.8 212.6 212.7 213.0 214.7 214.7 215.5 215.9 216.5 217.1 217.3 2010 217.5 217.4 217.4 217.4 217.2 217.2 217.6 218.1 218.4 219.0 219.4 220.4 2011 221.0 222.0 223.2 224.0 224.6 224.8 225.5 226.3 226.9 226.8 227.0 227.0 2012 227.5 228.4 229.1 229.2 228.5 228.6 228.7 230.1 231.4 231.8 231.0 231.0 Diagrammatically it can be represented as follows: (Bureau of labor Statistics, 2013). Trade deficit: By the year 2005 the net trade of US had been in deficit for more than 25 years. The trajectory revealed a deficit more than 700 billion dollars for 2005. The reason for long and persisting deficit in trade for the country is stringent trade barriers and declining competitiveness of the goods in international market. The long term performance requires continuous deterioration of the dollar or slow growth of the country as compared with other trading partners. Although there have been a slight surge in the trade deficit in the last few years mainly due to the fact of appreciation of the dollar and slow growth of trading partners. The situation caught up under the influence of macroeconomic and financial policies of the government as well as by the policy responses after the financial crisis (U.S. Dept of Commerce, 2013). The period of 1990s proved trade deficit is not twin of the budget deficit. The argument which derives trade deficit to be the result of low savings rate and the saving-investment gap is not correct. Trend for these economic indicators The chart shows unemployment rate to follow a cyclical path while consumer price index has taken the rising path from 2002. The rate of unemployment was highest unemployment in 2010 while consumer price index was highest in 2008. Impact on business Rise in unemployment implies contraction of job opportunities and businesses can avail more skilled labor at minimal cost and therefore profitability rises. Trade deficit has negative impact on the business opportunities. References Bureau of labor Statistics, (2013). Economy at a glance. Retrieved From: http://data.bls.gov/timeseries/LNS14000000?data_tool=XGtable. U.S. Dept of Commerce, (2013). Goods and Services Deficit Increases in November 2012. U.S. International Trade in Goods and Services Highlights. Retrieved From: http://www.census.gov/indicator/www/ustrade.html. Moreland, J. (2013). U.S. Trade Deficit Fosters Unemployment. Economy in Crisis. Retrieved From: http://economyincrisis.org/content/lack-jobs-due-our-massive-trade-deficit. Read More
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