Economic Forecast Paper
Economic Indicators Paper
The Housing Industry
By
Tracey Matthew
Andre ' Patterson
Julie Taylor
ECO/360
University of Phoenix
July 26, 2007
Mohyeddin Kassar, Instructor
Economic Indicators
Introduction As previously outlined in our team 's first project regarding the housing industry, there were six economic indicators which impact the housing industry. These indicators are GDP, the inflation rate, the unemployment rate, discount mortgage interest rates, housing starts and retail sales. Included will be a brief definition of each and its current status.
Real GDP Real GDP, or gross domestic product, is an inflation-adjusted measure that reflects the value of all goods and services produced in a given year. Unlike nominal GDP, real GDP can account for changes in the price level and often provides a more accurate figure (Investopedia, A Forbes Media company, 2007). According to a report released in December, 2006 Wells Fargo economists are optimistic about the 2007 economic growth. "The Gross Domestic Product (GDP) growth is expected to rebound as soon as next quarter" (2007 News Releases, 1999-2007). Dr. Jim Paulsen, chief investment strategist of Wells Capital Management predicts a 3.5 percent growth rate for 2007 based on expectations that the housing and automobile markets will flatten out.
The Inflation Rate Inflation can be defined as the overall general upward price movement of goods and services in an economy (BLS, 2007). It is a continual rise in price levels and, subsequently, purchasing power is falling. The Consumer Price Index (CPI) measures inflation as experienced by consumers in their day-to-day living expenses and is separated into two groups or populations of consumers: The CPI for All Urban Consumers (CPI-U) and the CPI for Urban Wage Earners and Clerical Workers (CPI-W). The current status of inflation as measured by calculating the current CPI-U and is published monthly by the Bureau of Labor Statistics.
The Housing Industry
By
Tracey Matthew
Andre ' Patterson
Julie Taylor
ECO/360
University of Phoenix
July 26, 2007
Mohyeddin Kassar, Instructor
Economic Indicators
Introduction As previously outlined in our team 's first project regarding the housing industry, there were six economic indicators which impact the housing industry. These indicators are GDP, the inflation rate, the unemployment rate, discount mortgage interest rates, housing starts and retail sales. Included will be a brief definition of each and its current status.
Real GDP Real GDP, or gross domestic product, is an inflation-adjusted measure that reflects the value of all goods and services produced in a given year. Unlike nominal GDP, real GDP can account for changes in the price level and often provides a more accurate figure (Investopedia, A Forbes Media company, 2007). According to a report released in December, 2006 Wells Fargo economists are optimistic about the 2007 economic growth. "The Gross Domestic Product (GDP) growth is expected to rebound as soon as next quarter" (2007 News Releases, 1999-2007). Dr. Jim Paulsen, chief investment strategist of Wells Capital Management predicts a 3.5 percent growth rate for 2007 based on expectations that the housing and automobile markets will flatten out.
The Inflation Rate Inflation can be defined as the overall general upward price movement of goods and services in an economy (BLS, 2007). It is a continual rise in price levels and, subsequently, purchasing power is falling. The Consumer Price Index (CPI) measures inflation as experienced by consumers in their day-to-day living expenses and is separated into two groups or populations of consumers: The CPI for All Urban Consumers (CPI-U) and the CPI for Urban Wage Earners and Clerical Workers (CPI-W). The current status of inflation as measured by calculating the current CPI-U and is published monthly by the Bureau of Labor Statistics.
Cited: (2007, July 16). Retrieved July 18, 2007, from Econoday Report: Housing Starts: http://www.nasdaq.com/econoday/reports 2007 News Releases. (1999-2007). Retrieved July 17, 2007, from Wells Fargo: http://www.wellsfargo.com Colander, D. C. (2004). Economics, 5e. McGraw-Hill Companies. EconEdLink. (2007, June 28). Retrieved July 25, 2007, from econedlink.org: http://www.econedlink.org/lessons Investopedia, A Forbes Media company. (2007). Retrieved July 17, 2007, from Investopedia.com: http://investopedia.com Overview of BLS Statistics on Inflation and consumer spending. (n.d.). Retrieved July 19, 2007, from U.S. Department of Labor: http://www.bls.gov