Question

1. What is the current level of annualized inflation, unemployment rate, and annual real GDP growth in the U.S.? What is the five-year historical high and low for each variable? What is the outlook for each variable for the next year? Cite your sources.
2. How does each variable compare to other developed nations and emerging markets? Cite your sources.

Answer 1

Annualized Inflation:

According to the U.S. Bureau of Labor Statistics, the annual inflation rate for the US is 1.7% for the 12 months ended August 2019. Inflation rate has moved from 0.7% in the year 2015 to 1.7% in 2019. Below table will help in understanding the change in inflation rate over the last five year.

Year	2015	2016	2017	2018	2019
Inflation Rate	0.7%	2.1%	2.1%	1.9%	1.7%

So, five year high is 2.1% in 2016 and 2017 and lowest point is in 2015 i.e. 0.7%

Forecast for the inflation rate is estimated to be around 1.90%. (Source: Trading economics)

Unemployment Rate:

The Current Population Survey (CPS) is a monthly survey of household which is conducted by the Bureau of Census, this survey provides data on the labor force, employment, unemployment, person not in the labor force, hours of work, earnings and other demographics.

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Average
2014	6.6	6.7	6.7	6.2	6.3	6.1	6.2	6.1	5.9	5.7	5.8	5.6	6.16
2015	5.7	5.5	5.4	5.4	5.6	5.3	5.2	5.1	5	5	5.1	5	5.28
2016	4.9	4.9	5	5	4.8	4.9	4.8	4.9	5	4.9	4.7	4.7	4.88
2017	4.7	4.7	4.4	4.4	4.4	4.3	4.3	4.4	4.2	4.1	4.2	4.1	4.35
2018	4.1	4.1	4	3.9	3.8	4	3.9	3.8	3.7	3.8	3.7	3.9	3.89
2019	4	3.8	3.8	3.6	3.6	3.7	3.7	3.7					3.74

Average yearly unemployment rate:Since the data for unemployment rate is calculated on monthly basis, we will calculate average yearly rate for better understanding. Data source U.S. Bureau of Labor Statistics.

Current rate: 3.74

Highest rate: 6.16 (2014)

Lowest rate: 3.89 (2018)

Forecast for unemployment rate is estimated to be around 4.10%. (Source: Trading Economics)

Real GDP Growth Rate:

The real GDP increased at an annual rate of 2% in the second quarter of 2019 (Source: Bureau of Economic Analysis) whereas, in the first quarter real GDP increased 3.1%. Fiver year low was in 2016 i.e. 1.3% and highest was in 2015 i.e. 4%.

Forecast for the GDP growth rate stands at 2% in 12 months time and in long-term it is projected to be around 1.8%. (Source: Trading economics)