State of the economy Essay Example | Topics and Well Written Essays - 750 words - 2

State of the economy - Essay Example It means that the U.S. economy has improved a lot as compared to the U.S. economy back in 2008. Based on the historical trend of quarter-to-quarter growth in real GDP, the U.S. real GDP tend to increase during the 4th quarter of each year. The trend strongly suggests that demand for products and services usually increase between October to December of each year. (See Figure I – Quarter-to-Quarter Growth in Real GDP on page 2) CPI is defined as â€Å"a measure of the overall cost of the goods and services bought by a typical consumer† (Mankiw 834). There is a significant relationship between the real GDP and CPI. Given that the real GDP falls into negative values, the CPI also tends to be at the lowest value. For instance, the real GDP during the 4th quarter of 2008 was -9%. As a result, the CPI during these periods was following a declining trend from 216.573 in October 2008 down to 210.228 in December 2008. (See Table I – Five-Year Summary of CPI below; Figure II – Five-Year CPI Trend in U.S. on page 3) Unemployment rate is defined as â€Å"the number of unemployed people who want to have a job but do not have one† (Kennedy 36). The U.S. unemployment rate is somehow related to the county’s real GDP. Since the real GDP was at the lowest during the last quarter in 2008, its unemployment rate started to rise significantly on January 2008. It means that there were a lot of companies in the U.S. that had to implement a massive lay-off or close down the company due to bankruptcy. Since the 4th quarter of 2010, the unemployment rate in the United States was moving on a downward trend. The continuous decrease in the U.S. unemployment rate was possible since the U.S. real GDP and CPI was somehow increasing. (See Table II – U.S. Unemployment Rate below; Figure III – Trend of U.S. Unemployment Rate on page 4) Other useful economic indicators include: the producer price index (PPI), interest rates, and export and imports. Specifically the PPI