BEA Report on US Economy: 2006-2009
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The paper discusses the data in the BEA announcement that supports the idea that the US is in a recession, and then explains how we can see the GDP increase was more or less the direct result of the Federal stimulus. The paper relates that the strongest areas of growth in the BEA report are found in exports of goods and the weakest area identified is in private residential investment. Furthermore, the paper reveals that the current recession is the strongest one that has been seen since at least 1971, and personal income declined in 2009, with a long-term decline in durable goods. The paper shows how the peaks and valleys of the business cycle are reflected across the board, in economic activity, personal income and in the growth in different sectors of the economy.
From the Paper:"A number of data points in the BEA announcement support the idea that the US is in a recession. The first is that unemployment is not only high, but is stable. The unemployment rate remained unchanged at 10%, and the economy shed a further 85,000 non-farm payrolls jobs. Furthermore, underemployment appears to have increased. The jobs lost were in production industries such as construction and manufacturing. Many of the jobs gained were in temporary help services. Thus, the quality of employment also declined.
"Additionally, the economy is facing deflation. The CPI-U less food and energy increased just 0.1% and was unchanged in November. There is no inflation risk at this point in time and with prices stable, they are far below Federal Reserve targets. Furthermore, the FOMC has set its target rate between 0 and 0.25%, also indicating a lack of belief that the economy is in recovery, which means it is still in recession. The downturn did not see real GDP declines over 10%, so it was just a recession as opposed to a depression.
"The GDP figure is promising, but the figure does account for the impacts of the federal stimulus bill, which were expected to show most prominently in the second half of 2009. The GDP figure was not supported by an increase in capacity utilization, as the FOMC note points out that resource utilization remains low."
Sample of Sources Used:
- Rampell, C. (2010) . US economy grew at vigorous pace in last quarter. New York Times. Retrieved September 8, 2010 from http://www.nytimes.com/2010/01/30/business/economy/30econ.html?_r=1
- BEA News Release: Gross domestic product: Fourth quarter 2009 (advance estimate). Retrieved September 8, 2010 from http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp4q09_adv.pdf
Cite this Analytical Essay:
BEA Report on US Economy: 2006-2009 (2013, April 28) Retrieved October 16, 2019, from https://www.academon.com/analytical-essay/bea-report-on-us-economy-2006-2009-152763/
"BEA Report on US Economy: 2006-2009" 28 April 2013. Web. 16 October. 2019. <https://www.academon.com/analytical-essay/bea-report-on-us-economy-2006-2009-152763/>