Question

What are the trends in the unemployment and inflation rates from the last 12 months?What government policies have been announced in response to recent changes in unemployment and inflation?

Answer 1

Inflation is growing at a moderate price. As the economy grows, inflation is seeing an increase. Growth saw an increase in January due to end of holiday discounts for clothing, cold weather in the South East. Inflation rose by 0.5% as prices for Gasoline, crude oil, apparel, and, healthcare increased. Minimum wages have increased. Prices of trucks, and, used cars continue their post-hurricane run-up. Auto insurance rates are climbing. Expected inflation in 2018 is 2.6% as compared to 2.1% in 2017. This owing to higher prices of gasoline, and, other products.

Prices for everything except food, and, energy will grow by 2.4%, compared to 2017's 1.7 percent. As the inflation is higher Federal reserve will keep increasing interest rate.

The rates were increased by 0.25% in February 2018. The central bank will increase the rates in March, June, and, December. Prices, except for food, and, energy will grow 2.4%, as compared to 2017's 1.7 percent. Food prices will increase by 1.7 percent. Housing will cost 3.3% more in 2018. Healthcare, and, other services' prices will go up by 2.8%. The increase last year was 1.6, and, 1.8 percent respectively.

3 % GDP growth is expected this year, against 2017's 2.3%. Consumer spending is increasing because of job gains, rising household income, and, credit utilization. The manufacturers are earning from a rise in exports. Imports are rising, reducing the GDP growth rate. A decrease in business inventory has reduced the inflation. Tax cuts, increase in business profitability, higher wages, and, low unemployment will keep interest rates low. Federal Reserve will not raise interest rates because the inflation is low.