Question

How has the U.S. economy been doing in recent years? Why do you think that is? Gather relevant economic statistics, such as the growth rate of real GDP, the unemployment rate, and the inflation rate, to support your case.

Answer 1

Hi,

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Question:

Answer:

Data From a Authentic Data House:

Economic Indicators	2015	2016	2017	2018	2019
GDP Growth	2.9	1.6	2.4	2.9	2.3
Unemployment Rate	5.3	4.9	4.3	3.9	3.7
Inflation (CPI in %)	0.1	1.3	2.1	2.4	1.8
Industrial Production growth (in %)	-1.0	-2.0	2.3	3.9	0.9
Fiscal Balance (% of GDP)	-2.4	-3.1	-3.4	-3.8	-4.6
Public Debt (% of GDP)	104	107	105	107	108

Data Analysis (from 2015-19):

We all know about a dip recession of 2008-09. It has because of housing bubble and weak financial regulation and subprime loans were the base of this crisis. USA was the most affective nation during this period. During this period real GDP fallen by 4.3%, Unemployment rate was 9.5%. Millions of people lost their jobs and he poverty rate in the United States increased, from 12.5 percent in 2007 to more than 15 percent in 2010, inflation rate plunged to 0.1%. It was a long time recession and badly affect the US economy and social system.But economy started growing after some years. If we study about the US economy in last five years then we found that the GDP growth in 2015 was better but still inflation, industrial production growth was very low.Unemployment rate was comparatively high. Fiscal deficit and public debt was also high but reasonably it was ok.  If we talk about 2016 then we found that GDP fallen down from the level of 2015 but unemployment rate reduced and inflation slightly increase but industrial production growth fallen more compare to 2015, fiscal deficit and public debt was got more widen.If we talk about 2017 then we found that GDP growth was better than 2016 but lower than the level of 2015, Inflation and and industrial production growth was increase and industrial growth rate was in + figure first time after 2015. Unemployment rate slightly reduced. Fiscal deficit slightly increased but public debt slightly decreased. If we talk about the 2018 then we found that GDP growth was better and equal to the level of 2015, unemployment rate also decreased inflation rate was far better than last 3 years, industrial growth rate was also far better than last 3 years but fiscal deficit and public debt increased. If we talk about the 2019 then we found that GDP growth decreased from previous year but unemployment rate decreased, inflation rate decreased but better than 2015 and 2016, Industrial growth rate fallen sharply and fiscal deficit and public debt increased.

Then after overall analysis we found that US economy was far better in 2017 and 2018 compare to 2015-16 and 19 but biggest challenges of the US economy is in latest year is to maintain a stable and reasonable level of inflation rate and reducing fiscal deficit and public debt because it is too high but public debt is comparatively very low from EU nations like, Italy, Spain, Greece and Japan. US is need of boosting consumption and investment level that will boost consumption and investment in economy that will increase aggregate demand in the economy. Increasing Aggregate demand will increase/boost the GDP growth, inflation level and employment.

How can solve the existing issues of US economy:

Fed rate is already at the lowest level an there is no more scope and other side high fiscal deficit and high level of public debt is a big challenge for the US government to follow expansionary fiscal policy. Government can increase money supply through reducing reserve requirement and buying government bond or take the help of helicopter money but is not good for long run.

Current situation and challenges:

In 2020 is the worst year for US and world economy also because of global pandemic or COVID-19 crisis. USA is the most effective nation of the world GDP fallen in current quater and potential GDP growth is very nominal or negative also,unemployment rate is 14.5% in April 2020. Millions of people are Corona positive and thousands of people have lost their live. US economy has been first time enter into a recession after 2008-09 crisis. the Government is need of a big recovery plan to economic recovery and boosting growth.

Conclusion:

So, After 2008-09 Crisis economy has recovered but and growing with some existing challenges like, high fiscal deficit, high public debt, unstable inflation rate but in last year economy was not good and current pandemic will affect more negatively and economy can enter into a recession.

Thank You