Economic Indicators the Change in the United Essay

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Economic Indicators

The change in the United States Real Gross Domestic Product (GDP) ratings has shown both ups and downs in the U.S. economy over the last two years. In the most recent quarter, the first quarter of 2011, the U.S. GDP increased over 2%. While the GDP has increased every quarter since mid-2009, the quarterly increase in each of the last four reported periods was weaker than the quarterly increase between mid-2009 and early 2010. Overall, however, the recent increases suggest the U.S. economy is recovering from the recent recession.

In 2008, as the United States was entering a period of recession, the real GDP decreased in three of the four quarters of the year, and increased only slightly in the fourth. The GDP trended downward from the beginning of the year, where the real GDP decreased by around 1% in the first quarter, to the end, when the real GDP decreased by about 7%. Fortunately, the 7% decrease in the fourth quarter of 2008 was the worse decrease in the GDP since 2008. In 2009, the GDP initially decreased, by nearly 5% in the first quarter and then by only about 1% in the second, and then began to rise again. Indeed, the nearly 5% increase in the GDP in the third quarter of 2009 is the highest increase since 2008, and while the GDP has maintained an increase every quarter since the second quarter of 2009, subsequent increases have varied between about 2.5% and about 4%. The recent trend of increasing GDPs in each quarter would suggest that, barring disaster, the GDP will likely continue to increase in future quarters.

The United States Consumer Price Index shows that prices for consumer goods tracked by the index have increased month-over-month for the last 9 months. The change in the CPI has not been extraordinary, but modest in each month.

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Along with the increase in GDP, the numbers suggest that the United States is experiencing economic growth. While the CPI has grown most months over the last three years, it did experience large drops as recession set in at the end of 2008, and stabilizing prices and small drops at the beginning of 2010. In between the end of 2008 and early 2010, prices increased in most quarters but often by only very small amounts. As long as the U.S. GDP continues to increase, one would expect that the CPI would also maintain its month-over-month increases.

Industrial Production in the United States has shown increases in all but one month since the middle of 2009. In many months, increases have been tiny, while in others, production has increased over 1%. Industrial production for the last year has shown fewer increases than it did in the prior year. The growth of industrial production in the United States since mid-2009 has been in step with the growth of the Consumer Price Index and the GDP. Prior to that, between the beginning of 2008 and mid-2009, industrial production shrank in every month except one, showing the effects of the recession sharply curtailed production in the United States. This may be in part because automobile production fell sharply as the major American auto manufacturers were close to failing completely during the recession (FOXnews.com, 2008, paras 1-9) and as the textbook stated, durable goods like cars are very sensitive to economic change. The dramatic drop in industrial production between 2008 and mid-2009 was a sharp reflection of the poor health of the economy as a whole. Fortunately, industrial production is mirroring other indexes and appears to be gaining strength as the economy recovers, and will probably continue to gain as long as the rest of the economy does well.

Changes in non-farm payrolls have been growing.....

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