Tracking the U.S Economy

This get out be followed by a personal stinting outlook or the remainder of 2014. contemporary State of U. S Economy A. Gross Domestic Product ( hoo-ha) agree to the figures illust numberd in the above graph brisk by the assurance of stinting Analysis (SEA), an agency of the Commerce Department, U. S. Real gross home(prenominal) festering contracted sharply at an annual rate of 1. 0 share in IQ 2014 compared to 2. 6 share in the anterior quarter. This mark the prototypal exasperate in economic harvest-feast since January 2011, a snip period of three forms.The drop in cattle ranch growth comes as a revision, down from the BEAKS original cipher released last April which showed an emergence of 0. 1 percent. The BEA announces earlyish estimates based on incomplete and partial entropy to digest a general picture of economic act. These estimates are usu onlyy revised, with a bite and 1-third estimate being released as more than data is acquired. The third and l ast revision for IQ 2014 is due to be released on June twenty-fifth and it remains to be seen how the GAP numbers will be affected. So why did the numbers decline so drasticall(a)y?Many economists charge up the anemic growth due to diminished personal credit line inventories, and the abnormally, harsh winter the land experienced during the beginning of the socio-economic class, however, not everyone agrees. Forbes quotes Steve Blitz, chief economist at ITS Investment Research who states, Looking through the rest of the report, we see the dusty hand of winter, although I am not sure to what extent the polar in the Midwest caused the level of exports to drop by $40. 5 one cardinal million million while imports only dropped $8. 8 gazillion. Surely the supply chains werent snappy in only one direction. Despite the historically, cold weather, there is more to the unexpect, weak per practiceance of the battered U. S economy. Numerous fractions of the GAP contend a hand in cau sing the decline in economic growth, including a mitigate in exports, lack of task investitures and decreased presidency spending. Reduction in concrete exports (real imports, which are a subtracted in the GAP calculation declined as well), accounted for a significant portion of the economic decline, followed by a decrease in inventory coronations, non residential fixed investments, residential investments and a cutback in state and local brass spending.The GAP s only supporter so far this grade came in the form of increased real personal consumer expenditures, which grew from 2. 1 percent from the previous estimate of 2. 0 percent, mainly reflecting sharp increases in receiptss and light increases in other areas. The BEA states, The downturn in the percent change in real GAP, primarily reflected a downturn in exports, a larger decrease in hole-and-corner(a) inventory investment, and downturns in nonresidential fixed investment and in state and local government spending th at were partly scratch by an upturn in federal government spending (2014).The table below, prepared by the BEA, shows precisely which components of GAP rose and tumbled in IQ 2014. B. hostile Trade (Exports & Imports) According to records maintained by the U. S Census bureau and the BEA, exports in April of $193. 3 billion and imports of $240. Billion resulted in a switch famine of $47. 2 billion, up from $44. 2 billion in andt against. The April exports were $0. 3 billion slight than March exports of $193. 7 billion, but imports were $2. 7 billion more than March imports of $237. 8 billion. The chart produced by the BEA below displays the U. S. internationalist trade in goods and services in a period of devil years, from April 2012 to April 2014. Goods deficit in April increased by $3. 3 billion from March to $65. 8 billion and services surplus increased by $0. 2 billion from March to $18. 6 billion. Exports of goods decreased $0. 6 billion to $135. Billion, but imports h owever increased by $2. 7 billion to $200. 9 billion. operate exports increased by $0. 3 billion to $58. 2 billion and imports followed adapt increasing by $0. 1 billion to $39. 7 billion. From April 2013 to April 2014, the goods and services deficit has increased by $6. Billion. Imports in that time period were up by 5. 4 percent or, $12. 4 billion and exports were up by 3. 0 percent, or $5. 6 billion. C. Gross Private Domestic Investments (Business Investment) Gross semiprivate domestic investment is a vital component of GAP because it gives us an idea of future productive capacity. It accounts for approximately 14 percent of our GAP and is considered to be the least stable component. The BEA defines gross private domestic investment as private fixed investment and change in private inventories.It is measured without a deduction for consumption of fixed capital and includes replacements and appendix to the capital stock, but excludes investment by U. S. Residents in other coun tries, consequently the domestic. The BEA divides business investments into to sub-categories, fixed nonresidential investment, residential investment and business inventories. In short, gross private domestic investment is n aggregate component of expenditures and includes fixed investments (nonresidential and residential) and change in private inventories.In the above graph from the Bureau of Labor Statistics ( conjure), the analysis depicts gross private domestic investment data with future projections as far as 2022. The growth rate for the time period of 2002 to 2012 is 0. 6 percent, with negative annual growth rates for all categories of fixed residential structures. However, the annual growth rate in business inventories in this same time period increased from the last cristal from -3. 3 percent to 12. 9 percent. They project business inventories to increase by 2022 at an average annual rate of 0. 6 percent. D. Consumer Spending The Consumer faith Index increased slightly in May.The index is currently at 83. 0, up from 81. 7 Just last month in April. The BEA deep describe that consumer spending increased to 10914. 40 billion in IQ 2014, up from 10831. 50 billion in Q 2013. U. S. Consumer spending fell for the first time in a year in April 2014 after dickens months of solid gains, but the decline is probably interim in constitution given the strengthening numbers in the Job market. The drop followed a revised 1. Percent increase in March that was the largest gain since prideful 2009. Real disposable personal income (DIP) remained sedate throughout IQ 2014 with a slight decreases in both April and May.E. Un function Rate As reported by the Bulls latest economic news release, total nonfat payroll physical exercise increased by 217,000 in May. The increase was due largely to nonrecreational and business services, health care and social assistance, leisure and hospitality, transportation and computer memory and temporary services. Employment in o ther sectors such as manufacturing, mine and logging, construction, wholesale ND retail trade, information and financial services, and government remained steady. The unemployment rate remained unchanged at 6. 3 percent. In May, following a decline of 0. 4 percent in April.The number of unemployed persons remained the same in May at 9. 8 million, a decrease of 1. 9 million over the last year. Over the previous year, nonfat payroll employment averaged approximately 197,000 a month. The long term unemployed numbers remained steady at 3. 4 million and accounted for 34. 6 percent of the unemployed. That number has declined by almost a million workers, as the economy continues to gradually ascertain ND improve. The graph below by the BEA shows the inclines and declines of the unemployment rate since 1990. Updated unemployment figures and charts for June 2014 will be released on July 3, 2014. F.Inflation Rate (ICP) The most recent release by the BLESS states that the ICP for all urban c onsumers (ICP-U) increased by 0. 3 percent in April on a seasonal workerly ad erected basis. Over the past year, the all items index increased by 2. 0 percent before seasonal adjustment. Gasoline, shelter, and food indexes all rose in April and so did all items less food and energy. The consumer price index for May will be released on June 17, 2014. G. Government Spending Fiscal and Monetary Policies According to the data reported by the BEA, current government expenditures exceeded receipts and caused a net government saving of -966. Billion during first quarter of 2014 an increase from Q 2013. Net bestow or net borrowing which is an alternative measure of the government pecuniary position was -1036. 5 billion, increasing from -968. 7 Q 2013. U. S. Economic Outlook remainder 2014 Coming off the harshest winter weve experienced in quite whatever time, the economy is expect to rebound and continue improving its upward growth in the remainder of 2014. The economy is expected to exp and 2. 4 percent with the retrieval of the trapping market and business investments. Government consumption is expected to slow economic growth this year for the fourth straight year in a row.Consumer spending will remain in the 2 percent range, but its possible that it might increase due to the increase in disposable personal income. This is assuming consumer potency increases as the year passes. Employment is expected to continue its growth of 180,000-190,000 Jobs gained monthly similar to the previous two years. Structural unemployment will continue to be an issue as most Jobs created will be in he food service and retail industries. Small businesses are expected to gain confidence and provide support to the economic growth in 2014 with a key root word of funding thats been missing since the recession office equity.The increase in home value over the previous year and the ongoing housing recovery is expected to support small businesses. The recovering housing market will play a role in GAP growth as home values continue to cut fueling construction activity pencil lead to an accelerated footstep in residential investment. Accelerated business investment will gain approximately 2. 5 percent to virtually 4. Percent in the following quarters driven by goodly gains in nonresidential structures and slight increases in equipment and software expenditures. Growing posit for industrial space will support the increase in business investments.Inflation will rise modestly from the lows of 2013 but will remain humble. Consumer prices will rise as producer prices rise due to global and domestic demand. Net exports will play a leading role and is expected to add to the overall GAP growth. Economists predict a 6. 6 percent rate of growth, along with the support of the oil boom to increase the pace of export activity. U. S. Economic Personal Outlook 2014 From the extensive research Ive make on this topic, my personal outlook on the economy for 2014 in one word, su bpart. I expect GAP to grow slightly over the year due to more than one component.Consumer spending is a cockeyed prognosis to increase most simply because disposable income is increasing. I understand that we just recently went through a recession and money conservation would be wise, but were a consumer nation and a consumer based culture, therefore I expect personal consumer expenditures to rise. The winter that affected the nation during the ginning of the year slowed growth but in March, when the weather started to lift consumer expenditures skyrocketed. Personally, it would seem as if consumer confidence is on the rise and the data supports my theory.I believe the increasing home values will embolden consumers and business owners alike and add to economic growth, with businesses leading the way. I feel as if consumers arent ready to make such a big financial commitment such as a mortgage and the ones willing to take risks will be the entrepreneurs or the business owners, so I expect to see growth in business investments. residential investments will continue to improve as confidence is restored in the housing market allowing consumers to purchase rental properties to supplement or increase their income.Non residential investments will increase as well as values rise due to demand but Im not quite sure how strong this demand will be. Being the consumer culture we are, I expect us to import more than we export like we have for over a two decades now, however, the strengthening oil and gas sector in the country will gain momentum, gradually relieving us of our oil dependency on OPEC nations in the years to come, decreasing our imports of foreign oil. Economic growth in 2014 may be slow, but its much better compared to where we were as a nation a couple of years ago.