In this assignment you will visit the website of the US Bure

In this assignment, you will visit the website of the U.S. Bureau of Economic Analysis (BEA) and review current information regarding current real Gross Domestic Product (GDP) trends. You can find this information by clicking here (Links to an external site.)Links to an external site. and then selecting the \"Release Highlights\" link on the right hand side of the webpage.

Answer the following questions in essay form (500 words minimum). Your completed essay should be in either APA or MLA format and include citations from at least 3 sources (1 citation may include the textbook and 1 citation may include the Bureau of Economic Analysis website).   Save your work as an doc or docx file, and submit your completed essay through this link above, which is the name for the assignment.

What trends in real GDP have occurred in the time period shown in the BEA release highlights document?

What time period shown in the document experienced the most significant growth?

What time period shown in the document experienced the least amount of growth?

Based on the data you have researched, what do you project real GDP will do during the duration of this year? Be specific in your answer.

What will be the primary cause that will cause your prediction in the previous question to occur? Why?

Solution

Based on the release highlights disseminated publicly by the U.S. Bureau of Economic Analysis (BEA),the quarterly data on the growth rate of real GDP from 2014 to 2018,the growth rate shows a quite fluctuating trend with multiple ups and downs across various yearly quarters.The data has been divided into 4 quarters for each year from 2014 to 2018 and basically reflects the quarterly fluctuations in the GDP growth rate.From a significantly high growth rate of almost 5% during the 2nd and 3rd quarter of 2014,it began to gradually decline throughout all 4 quarters of 2015 and reached almost lowest rate of less than 1% during the last quarter of 2015.It further increased from the lowest rate during the end of 2015 to a moderate 3% during the 3rd quarter of 2016 but again droped druring the last and the 1st quarter of 2017.The beggining of 2018 exhibited a much optimistic trend in the GDP growth rate with a substantial growth rate of reaching 3% again mainly due to notable increase in government expenditure,consumer spending,export level and inventory investment.

As the report documents,the growth rate has been most impressive during the 3rd quarter of 2014 with an annual change of almost 2.4% from 2013 to 2014.It has been evident that the annual change in GDP growth from 2013 to 2014 has been the highest since the recession during end of 2000s.The growth rate almost 5% during the 2nd and 3rd quarter of 2014 and indicates the positive recovering trend of the trend which has since suffered the prolonged impacts of the recession.Based on an article published by Forbes in 2015,the major factors contributing to this impressive recovery or growth are evidently identified as increase in consumer spending and personal consumer expenditure,lower oil prices inducing higher demand for other oil related goods,increased inventory growth,export level and business investment which mostly includes non-government/federal investment.

On the other hand,based on the BEA highlights,the growth rate reached the lowest point of even less than 1% during the last quarter of 2015 with annual change of roughly 2.6% from 2014 to 2015.This is a period of a transient economic slowdown characterized by slower inventory growth,drop in export level compared to the previous year,lower consumer confidence and spending level and continuosly expanding fiscal deficit thereby reducing the federal/government expenditure.

The US economy has reached a stable position during the beginning of 2018 with gradual increase in the business investment and productive capacity of the firms/companies.The labor market has also recovered as gradual increase in consumer spending has also prompted firms to hire more labor force and other capital resources.The BEA highlights illustrates a stable growth rate of 2-3% during the 1st and 2nd quarter of 2018 with this range to be consistent at least in near future or til the end of this year as well.With a gradual projected growth in the manufacturing and service sector,the overall employment level is the country is also projected to grow slowly but consistently.Hence,the unemployment rate is also expected to drop but slowly in the coming future.Hence,as witnessed in the 1st and middle quarter of 2018,the growth in business investment will expectedly continue and with the continuity of the present rate of growth in retail,manufacturing and service sectors,the overall unemployment level is also projected to decrease slightly.Hence,although there is not much optimism of substantial GDP growth rate at least til the end of this year,but the current growth rate would be expectedly maintained with the continuation of the current macroeconomic trends or patterns.

Similar to the real GDP growth rate,the inflation rate is also expected to remain between 2 and 2.5% under the target rate set by the FED.The inflation rate has been around 2% during the 1st and 2nd quarter of 2018 and under the target rate set by the FED it is not expected to rise above 2.5% in the coming future.A more controlled and stable inflation rate would ensure overall price stability in the country thereby ascertaining a consistently stable growth in consumer demand and spending which will consequently generate higher production level as well in the long term.This sequential pattern would imply a stable employment pattern and resource mobility as well thereby maintaining the moderate growth rate achieved during 2018 thus far.In this context, the interest rate has remained at 2% during the begining and middle of 2018 and is expected to increase in 2019 and 2020 respectively under the target rate set by the FED which could provide more financial security for firms/companies and investors in terms of business and financial investment.

Citation

Kimberely, A. (2018, June 13). US Economic Outlook for 2018 and Beyond. Retrieved from https://www.thebalance.com/us-economic-outlook-3305669

Aversa, J. (2018, May 30). GDP INCREASES IN FIRST QUARTER. Retrieved from https://www.bea.gov/newsreleases/national/gdp/gdphighlights.pdf

Sharf, S. (2015, Jan 30). U.S. 2.4% Economic Growth In 2014 Strongest Since Recession.Retrieved from https://www.forbes.com/sites/samanthasharf/2015/01/30/u-s-economy-grew-2-6-in-fourth-quarter-2-4-in-2014/#25c1342e18eb