The United States Starting to Recover

The United States Starting to Recover

The United States economy has suffered the worst recession in 2007 to present time, and has endured an anemic recovery since. However, the economic landscape may be changing. United States unemployment has fallen for the past years. Four economic factors (unemployment rate, expectation, consumer income, and interest rates) affect supply and demand in different ways as discussed in this paper.

Unemployment

It has been going on five+ years since unemployment has been such a factor in the United States. The unemployment rate is the percentage of the people that is willing to work but for any other reasons in not been working. This statistic is a little deceiving, as it does not take into account the people who have given up looking for work. Given that caveat, experts believe that the number of people out of work is significantly higher. The Bureau of Labor Statistics (BLS) reports the unemployment rate. The current unemployment rate is dropping this gives the Americans of the United States hope that this will provide an increase of jobs. The president and government keep brainstorming and has announced a plan to bring jobs back to the United States. The government is expecting to see a continuing increase in jobs. The president is also proposing to create thousands of jobs for veterans (CNN, 2012). When people have jobs they can buy goods that will help the economy get back to normal.

The rate of unemployment affects supply and demand in that the more people looking for work, the fewer people will be buying (demand), and the retail sector will decline. If the demand goes down then companies will produce less money they make with the same overhead. To improve their position companies will look to reduce their overhead that usually means a reduction in workforce. This goes only adds to the unemployment rate and the cycle starts over again.

Consumer Income

Consumer income is also known as discretionary income. The more discretionary income a person has the more goods or services he/she can buy. Based on information from the Bureau of Economic Analysis, consumer income rose in June 2012. Goods producing industries, manufacturing, and service producing industries are areas that had an increase in personal income in June 2012. An increase in personal income is an increase in the short run as it attempts to get the economy running by providing more spendable income for consumers. By hiring more workers companies can produce more goods, more production creates more income for the company, the workers, and more money back into the economy.

Interest Rates

This is extra money the bank charges the borrower to get a loan amount of money need it. This is known as a percentage of the total amount lend. There are two types of interest