Us Economy
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US Economy
The US economy is one of the largest and the most technologically advanced national systems in the world, with more than 10 trillion dollars in GDP.
“After the economic boom in 1990, The US economy suffered a number of serious setbacks, including the bursting of the technology bubble; the Sept. 11, 2001, terrorist attacks; significant losses of stock market wealth; a stagnant job market; corporate accounting scandals; uncertainties related to the war in Iraq; and increase in oil price .” (
Although many factors threaten the development of the economy, the recovery is expected in the near future. According to New York Stock Exchange (NYSE), the overall market value is increasing constantly; from 5,687.87 (April 2005) to 6,360.69 (March 2006). Some factors expected to contribute to the recovery are increasing in employment rate, rising in disposable income, and growth in consumer spending.
Increase in employment rate
This is a good sign for the economy because GDP increase as more people go to work. Civilian household employment is projected to increase by 1.2% per year from 2002 to 2012. The result is that about 17.3 million employed persons will be added to the economy over this 10-year period.
The recovery is supported by the decrease in unemployment rate from 5.1% last November to 4.8% and the increase in payroll employment; number of people included in the payroll system of companies, from 48,000 in September last year to 243,000 people in February 2006.
Rising in disposable income
As more people are employed, they earn more income which available for them to either save or spend. The increase in disposable income is another contribution to the recovery of the economy no matter it is saved or spent because it will help improve the real standard of living.
According to the forecast, nominal disposable income on per capital basis is expected to increase at an average annual rate of 4.3% from 2002 to 2012, reaching a level of $41,459 in the latter year.
Growth in consumer spending
Since people earn more disposable income, they have more spending power. This would improve the growth of about two-third of overall economic activities.
According to Bureau of Labor Statistic, personal consumption spending is expected to grow at an average annual rate of 2.8% from 2002 to 2012. Major contributors are consumer spending on durable goods such as cars and light trucks which was the most outstanding during the past few years and consumer purchases of health care services due to the growing in elderly population and the advancement in medical technology (