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GDP & Employment/Inflation Essay

Introduction

The current GDP growth rate for the US economy stands at about 2.5%. It is interesting to note that in each of the last quarters of the years, the rate is higher, but at the start of a new year the rate decreases in the first quarter. For example 2011, QIV is 4.9% while 2012 QI is 3.7%.  The stage of the business cycle the US economy may be is the expansion/recovery stage since its GDP trends show increase in most of the quarters.

The GDP of any country may not be considered as an accurate economic well-being measure of a country since it only measures one aspect, the economic performance of a country and ignores other issues (Gordon, & National Bureau of Economic Research Conference on Business Cycles, 1986). The limitations include GDP does not consider inflation or deflation, does not measure externalities and changes due to change in change in exchange rate and it does not measure black markets or illegal transactions (McEachern, & Thomson South-Western, 2008).

Unemployment and Inflation

The most surprising is the rate of unemployment separated on race basis. The rate for the blacks is quite higher, at about 12.0% in Feb. 2014, compared to 5.8% whites or even 8.1% Latinos or Hispanic in the same month. The rate for the unemployed blacks ranges about between 11% and 13% over the last periods. Unemployment is high in blacks, and teenagers at 21.4%. Men have higher rate of 6.4% in Feb.2014 compared to women at 5.9% which seems to change very slightly. Unemployment rate is low among the highly educated (Gordon, 2004). Women seem to have higher chances of employment since their unemployment rate is low compared to males. The teenagers are still in schools hence higher rate. The rates high rates of unemployment could also be attributed to inflation which causes loss of jobs (Carlberg, 2012).

References

Carlberg, M. (2012). Unemployment and inflation in economic crises. Berlin: Springer.

Gordon, R. J. (2004). Productivity growth, inflation, and unemployment: The collected essays     of Robert J. Gordon. Cambridge (UK: Cambridge University Press.

Gordon, R. J., & National Bureau of Economic Research Conference on Business Cycles.          (1986). The American business cycle: Continuity and change. Chicago: University of Chicago Press.

McEachern, W. A., & Thomson South-Western. (2008). Contemporary economics. Mason,        Ohio: Thomson South-Western.


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