The economy in the United States has been on the rise for the past several months. The employment rates are improving, new jobs are being created and millions of people in America are finding reasons to be cheerful. The current economic growth has been rapid and “several new economic developments have occurred in the United States during this last quarter.” says Nitish Pahwa of Michigan State University. The current drop in oil prices has made it even easier for the US consumers and businesses to increase their spending during the last quarter during the Christmas holidays.
Many see the current surge in the US economy as a gift for the Christmas and the Holiday season. According to Jeffry Bartash, who writes for the marketwatch.com, “The gift millions of Americans would like for Christmas is a fast-improving economy. And it’s looking more and more like they are getting it.”
Growth in real GDP
According to the “third” estimate released by the Bureau of Economic Analysis there was an increase in GDP (Gross Domestic Product) at an annual rate of 5.0 percent in the third quarter of 2014. This momentum is likely to continue into the 2015, as many of the expert economists predict.
Currently businesses are booming again in the United States and according to the Employment Situation released on Friday by the Bureau of Labor Statistics, there has been a payroll employment increase of 321,000 in November. At current rate, the unemployment rate could tumble toward the 5% mark in 2015 from 5.8% in November.
Jeffry Bartash also added that “The U.S. is on track to add about 2.9 million new jobs this year to mark the biggest gain since 1999, but another big increase in 2015 would help whittle down the still unusually high number of unemployed — some 18 million people who say they want a full-time job but can’t find one.”
Neil Dutta, head of economics at Renaissance Macro Research thinks that “There is considerable momentum in the economy,” He also thinks that an economic breakout has already occurred and the trend is likely to continue to accelerate into the upcoming years.
Increasing Income inequality
Income inequality has been rising and widening the gap in the United States for decades. Drew DeSilver, a Senior Writer at the Pew Research Center wrote in an article titled: “U.S. income inequality, on rise for decades, is now highest since 1928” that even though most Americans don’t like to talk about inequality, “There are a lot of ways to measure economic inequality, but one basic approach is to look at how much income flows to groups at different steps on the economic ladder.”
In the long term the US economy has suffered from periods of trouble associated with income inequalities. In the past, people suffered from stagnant wages and uneven distribution of wealth. It has also been observed in the recent decades that certain groups of people in the general population did not benefit from the economic growth as much as others. There were economic hardships, lack of work, rise in unemployment and insecurities among people.
Even at current rate of economic growth, although the income for the educated and highly trained population has increased, the income levels of low level and non skilled workers have not increased at the same rate.
An increase in consumer spending is the greatest indication that the US economy has been picking up at a faster pace than ever. MarketWatch predicted the spending to have jumped 0.5% in November. In addition, the plummeting gas prices have put some extra spending money in the pockets of consumers to spend on other goods and services. Falling energy costs are making it easier for American consumers to offset inflation and stretch their paychecks even more over the holidays.
Business, investments and industries are also experiencing upward trends following the boost in current economy. According to the new NADA DATA, In November, there were 1.3 million light-vehicle sales, up 1.6 percent from October and up 4.5 percent from November 2013. The data also shows that “The November 2014 Seasonally Adjusted Annual Rate* (SAAR) for light-vehicle sales was 17.1 million, the second time this year that the SAAR exceeded 17 million.” Boeing took in orders for 224 new planes in November. Car dealers have reported that car sales have been increasing without resorting to “deep discounts,” Sales of electronics, appliances and luxury and fashion merchandise is also on the rise, which shows that the demand for goods and services are increasing and the economy is strengthening.
The only sector that has not shown any significant growth is in the housing and building construction sector. Construction and sales of new houses have slowed down a bit in the recent months, in fact he United States has been in a continual decline for more than 7 years, and “no one is expecting a breakout anytime soon.” (MarketWatch)
Do you agree that the US economy has become stronger than ever before in 2014? Please add your thoughts in the comment box below.
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Source: Institute of Ecolonomics
Related articles & Resources:
- Economic Indicators & Current Economic Trends in the United States | Institute of Ecolonomics
- Surging economy is best gift for Christmas – MarketWatch
- U.S. Economy at a Glance
- U. S. income inequality, on rise for decades, is now highest since 1928 | Pew Research Center
- News Release: Gross Domestic Product
- NADA DATA