Macroeconomics and Selected Trends

Macroeconomic Conditions and Selected Trends Gross Domestic Product (GDP) is an economic indicator used to measure a country’s total output. It includes everything produced by all the people and companies in the country. In order to compare GDP from one year to the next it is important to use what is known as Real GDP. Real GDP makes a distinction by forgoing income from U.S. companies and people outside the country, which would contribute to GNI, removing the effects of inflation and only counting final products.
Figure A

Trillions of Current $
%Change in GDP
2010
14.958
3.7
2011
15.533
3.8
2012
16.244
4.6

Figure A, taken from the Bureau of Economic Analysis (BEA), shows there is a trend of moderate growth (~3%) in GDP. However, the current trend starts around the 2nd quarter of 2009. From Q2 2009 – Q3 2013 the annual growth rate is about 2.2% (BEA). This rate of growth explains our current unemployment level and labor market. In order for the unemployment percentage to fall significantly there must be a high growth rate in GDP.

Figure B

In Figure B, we can see that the unemployment rate has not returned to pre-recession levels, but it has declined and this supports the previous thought in which there is a negative correlation between the unemployment rate and GDP growth rate. The Bureau of Labor Statistics (BLS) estimates the unemployment rate for October 2013 was 7.3%. This is the lowest unemployment rate since December 2008, which many experts, including the BLS, consider to be a point of significant downturn during the recession. From 2007-2009 the construction (13.7%) and manufacturing (10%) industries experienced their largest employment declines since WWII (BLS). However, during that same period, employment in education and health services increased by about 5%. This may be because the first wave of baby boomers began to age and required more health services. Also, according to the National Center for Educations

Cited: Barnes, Ryan. "Economic Indicators: Durable Goods Report." Investopedia,com. N.p., n.d. Web. 12 Nov. 2013. "BEA : News Release: Revised Gross Domestic Product by Industry." Bea.gov "Bureau of Labor Statistics." Labor Force Statistics from the Current Population Survey. U.S. Bureau of Labor Statistics, n.d. Web. 12 Nov. 2013. . "Bureau of Labor Statistics." Labor Force Statistics from the Current Population Survey "Consumer Price Index for All Urban Consumers." Bls.gov. U.S. Bureau of Labor Statistics, n.d. Web. 12 Nov. 2013. . "CPI News Releases." Bls.gov Harvey, John T. "Why You Are Paying So Much for Gas." Forbes. Forbes Magazine, 26 Apr. 2011. Web. 12 Nov. 2013. Holahan, John, Ph.D, and Stacey McMorrow, Ph.D "Immediate Transition to College." Nces.ed.gov. Institute of Education Sciences, n.d. Web. 12 Nov. 2013. . "Key National Indicators of Well-Being." Childstats.gov Krugman, Paul. "Recent Trends in Government Spending." Nytimes.com. New York Times, 24 Dec. 2010. Web. 11 Nov. 2013. Leber, Rebecca Mantell, Ruth. "Housing Now Accounts for Almost One-fifth of Economic Growth." Marketwatch.com. Wall Street Journal, 26 June 2013. Web. 12 Nov. 2013. Norbash, Ali "Policy Basics: Where Do Our Federal Tax Dollars Go?" Cbpp.org. Center on Budget and Policy Priorities, 12 Apr. 2013. Web. 13 Nov. 2013. "Press Release." Federalreserve.gov "The Recession of 2007-2009." Bls.gov. U.S. Bureau of Labor Statistics, n.d. Web. 11 Nov. 2013. . "SNAP Annual Summary." SNAP Annual Summary