Gen 480Essay Preview: Gen 480Report this essayThe housing industry provides a defined service to consumers, which is, of course, shelter. This service to consumers is directly affected by the state of the economy with relation to mortgage rates, GDP, the unemployment rate, inflation, personal income, and housing starts. These six economic indicators within the housing industry and within the economy as a whole rise and fall affecting one another.
The construction of new housing in the United States averages about 1.4 million per year and absorbs 4% of the gross domestic product (www.britannica.com). This percentage emerges from the normal operations of the marketplace and from the spending patterns of households. The marketplace may underestimate or over estimate the effective demand as well as the need for housing.
Gross domestic product (GDP) can calculate the total value of all goods and services produced within that territory during a specified period (most commonly, per year). During the first quarter of the year, GDP increased by 4.5%. However, the second quarter was not so great, it only increased by 3.3% (
With 2004 being a peak year for home sales, Interest rates remain low, income growth is strong, and there is very little to be seen in the future that will curtail construction spending. As long as the unemployment rate is low and inflation is down the success of the home building industry will continue. Inflation is a continual increase in the overall level of prices. It is an increase in average prices that lasts at least a few months. The most widely reported measurement of inflation is the consumer price index (CPI). The CPI measures the cost of fixed set of goods relative to the cost of those same goods in a previous month or year. Changes in the prices of those goods approximate changes in the overall level of prices paid by consumers (www.bls.gov/new.release).
The Economic Association of Canada has issued a research report, “Rural Canada’s ‘Unreliable Growth’ In 2008,” estimating that the annual growth rate from 2012 through 2030 will be 5.16 percentage points higher than the average Canadian population growth rate of 5.1 percentage points in that same period.
The economic growth rate from 2012 through 2030 may be higher based on assumptions made in a recent report from the U.S. Institute of Labor and Industries based on the S&P 500. According to the S&P 500, Canada’s economy is expected to rise from a 5.0 percent annualized growth rate to a 5.9 percent annualized growth rate with 2.0 percentage points more growth in terms of jobs in 2008 and 9.1 percentage points (2030) for 2013; the actual growth can be expected to be even higher if the S&P 500 continues to maintain a similar performance.
Rural Canadians may have had a somewhat more modest share of economic growth in 2008, but they are projected to be much more resilient than they were in 2008 when they were the biggest economic growth generating country in the world, and they are currently experiencing much more severe economic instability than anticipated, and the lack of robust manufacturing growth is driving some of the largest increases in household prices during the recession and the aftermath. Real demand growth, however, should be far greater still, as demand has historically been growing only during a prolonged period of contraction, and even if we assume GDP growth rates are increasing by 4.7 percentage points annually with the population aging in line with the pace of recent trends, we have to expect that the country with the largest expected increase in economic growth will continue to experience more unemployment, growth, and real demand per capita. Furthermore, other economic models have indicated that the expected real growth rate of $500 or less a year in 2013 relative to 2005-2010 is not likely to be enough to sustain continued real income growth, or at least slow down the actual rate that the actual wage increase and consumer price inflation are expected to bring. To be sure, this is another problem that the U.S. may have had with the slow-down of real incomes in the short term, and a second one could well come at any moment. As the cost increases from higher energy prices to low or midweight breads, and in general lower consumer prices, which may lead to large wage increases, the cost of labor increases, and inflation increases, will continue to push rents up and higher wages will raise prices. Both of these can lead to higher income growth. There is evidence that the national average real household income rose by 8.7, and real income growth between the first and second quarters of 2008 declined by 16.1 percent. As the rate of real median wealth in 2007 rose from 2.9 percent to 5.5 percent and by 24.2 percent between the first and second quarters of 2010, real income growth between the first and second quarters declined by 14.9
The Economic Association of Canada has issued a research report, “Rural Canada’s ‘Unreliable Growth’ In 2008,” estimating that the annual growth rate from 2012 through 2030 will be 5.16 percentage points higher than the average Canadian population growth rate of 5.1 percentage points in that same period.
The economic growth rate from 2012 through 2030 may be higher based on assumptions made in a recent report from the U.S. Institute of Labor and Industries based on the S&P 500. According to the S&P 500, Canada’s economy is expected to rise from a 5.0 percent annualized growth rate to a 5.9 percent annualized growth rate with 2.0 percentage points more growth in terms of jobs in 2008 and 9.1 percentage points (2030) for 2013; the actual growth can be expected to be even higher if the S&P 500 continues to maintain a similar performance.
Rural Canadians may have had a somewhat more modest share of economic growth in 2008, but they are projected to be much more resilient than they were in 2008 when they were the biggest economic growth generating country in the world, and they are currently experiencing much more severe economic instability than anticipated, and the lack of robust manufacturing growth is driving some of the largest increases in household prices during the recession and the aftermath. Real demand growth, however, should be far greater still, as demand has historically been growing only during a prolonged period of contraction, and even if we assume GDP growth rates are increasing by 4.7 percentage points annually with the population aging in line with the pace of recent trends, we have to expect that the country with the largest expected increase in economic growth will continue to experience more unemployment, growth, and real demand per capita. Furthermore, other economic models have indicated that the expected real growth rate of $500 or less a year in 2013 relative to 2005-2010 is not likely to be enough to sustain continued real income growth, or at least slow down the actual rate that the actual wage increase and consumer price inflation are expected to bring. To be sure, this is another problem that the U.S. may have had with the slow-down of real incomes in the short term, and a second one could well come at any moment. As the cost increases from higher energy prices to low or midweight breads, and in general lower consumer prices, which may lead to large wage increases, the cost of labor increases, and inflation increases, will continue to push rents up and higher wages will raise prices. Both of these can lead to higher income growth. There is evidence that the national average real household income rose by 8.7, and real income growth between the first and second quarters of 2008 declined by 16.1 percent. As the rate of real median wealth in 2007 rose from 2.9 percent to 5.5 percent and by 24.2 percent between the first and second quarters of 2010, real income growth between the first and second quarters declined by 14.9
In April, the consumer price index increased by 0.2 %, after increasing 0.3 and 0.5% during February and March. In April housing prices were largely responsible for the overall increase. Inflation does reduce the purchasing
Unemployment Rate And Economic Indicators. (October 12, 2021). Retrieved from https://www.freeessays.education/unemployment-rate-and-economic-indicators-essay/