How To Decrease Unemployment Rate In The United States

Since the recession the United States economy faced in 2008 and 2009, the economy has been slowly recovering. Currently, the unemployment rate in the United States is 4.9%(“Unemployment Rate” ). The Federal Reserve predicts that by the end of 2017, the unemployment rate to decrease to 4.8 % (“Economic Outlook” ). Inflation is also decreasing and it is expected to continue to until 2017 ( “Economic Outlook”). As inflation decreases, the price level will fall and the purchasing power of consumers will increase. The outlook of the economy is not completely optimistic though. By 2025, the debt of the United states is expected to increase from 12.8 trillion to 21.0 trillion (“Economic Outlook” ). This is 79% of the GDP (“Economic Outlook” ). Interest rates are also supposed to increase (“Economic Outlook” ). Higher interest rates will greatly impact the stocks and bonds market. Higher interest rates will make investors want to invest less in stocks and bonds which will then cause the stocks and bonds market to plummet (“Economic Outlook” ). The interest rate is supposed to grow from 1.7% in 2015 to a rate of 2.0% in 2016 (“Economic Outlook” ). With increasing interest rates and a rising debt level, the state of economic recovery will be short lived.

The unemployment rate is a way for economists to tell if the economy is growing or contracting. According to Roger Arnold, author of Economics ECO 2013, the natural unemployment rate is supposed to be about 5 to 6.5% (139). Since the natural unemployment rate is greater than the real unemployment rate of 4.9%, the economy is in an inflationary gap
"Types of Unemployment." Economics ECO 2013. 11th ed. Mason: Cengage Learning, 2014. 139+. Print.

"Economic Outlook 2016." Stock Market Advice Investment Newsletters Profit Confidential. Lombardi Publishing Corperation, n.d. Web. 09 Mar. 2016.

"Unemployment Rate." Bureau of Labor Statistics Data. U.S. Bureau of Labor Statistics, n.d. Web. 09 Mar.