U.S. Economic Performance

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Presentation transcript:

U.S. Economic Performance GOVT 2305, Module 1

U.S. GDP Growth Rate Since 2007 What happened in 2008-2009? The Great Recession Recovery What is the period of growth after a recession called?

GDP growth for the second quarter 2016 was 1.2 %.

What is amusing about the sign? Recession An economic slowdown characterized by declining economic output and rising unemployment. Data indicators for recession include GDP growth and unemployment.

Depression A severe and prolonged drop in economic activity.

Household Income Since 2000 The Great Recession has ended, but household income has not fully recovered. Household Income Since 2000

Unemployment Rate Since 2008 The June 2016 unemployment rate was 4.7 %. .

The employment rate has not recovered from the Recession. Labor Participation

Corporate profits have more than recovered from the Great Recession and are growing more rapidly than the nation’s economy. Corporate Profits

Employee earnings have not recovered Employee earnings have not recovered. Corporate profits are up but they have not been passed along to the workers. Wages

CEO Pay

Dow Jones Industrial Average What is this chart measuring? The stock market has more than recovered. At the end of August 2016, the market stood at 18,503. The Dow Jones measures stock prices. Dow Jones Industrial Average

Low because of reduced demand for goods, services, and labor Inflation A general increase in prices and wages, diminished purchasing power of the currency Would you expect inflation to be high or low during a recession? Why? Low because of reduced demand for goods, services, and labor

The current inflation rate is below 1 percent. CPI = consumer price index RPI = retail price index Most economists believe that a healthy economy has a modest unemployment rate of 5 percent or less and a moderate inflation rate of less than 5 percent. The current inflation rate is below 1 percent.

What is a recession. What economic indicators point to recession What is a recession? What economic indicators point to recession? What is a depression? How has the U.S. economy performed in terms of GDP growth, household income, unemployment rate, employment rate, corporate profits, CEO pay, stock market averages, and wages? What is inflation? Is the current inflation rate relatively high or low? What You Have Learned