U.S.Economy: Timely Need of Preventive Measures and Due Considerations
Dr Surendra Bhakta Pradhanang
July 09, 2008
The United States of America is considered as a heaven of the earth. The people of the world imagine the heavenly comfort and happiness, which would dream of their livelihood brightening in America. The price of the commodity rarely increases and every thing is easy and system – based. No problem or constraint is registered. The freedom and ideal society existed – in full and real democratic form.
At present, the situation in the United States has been changed due to time factor and effect of global economy. The US economy is suffered by terrorism, Iraq war, gasoline price rise, unemployment .Critically, housing values and stock prices have gone down to worse situation.
The average price level of gasoline in the US market reached to $ 4.03.The price of the gasoline is fluctuating day by day as a rising tendency of price level. Some economists are claiming that market conditions have improved in recent months, but are not coming to normal. After reviewing the retail sales data, economists at Global Insight predicted the government would increase GDP to 1 % at an annual rate. Further, consumer spending will be partially increased due to tax rebates and stimulates checks. The US economy is badly under recession warning scenario held about the risks.
The credit crisis and energy cost are threats to the US economy. A general definition of recession shows the negative GDP.The National Bureau of Economic Research states that a recession is defined as a period of significant decline in economic activity across GDP, income and retail sales that take the period of a few months more.
In a latest survey conducted in the month of May, the recession was gone down by 62.7% from 70 %.We have claims for unemployment benefits recorded to rise up 400,000 a week in May during recession.
The US economy environment is similar to the early 1990s.The Central Bank started cutting the federal funds rate, at which banks lend from 5.25 % in September to 2% .The Fed officials or survey stated that U.S.economy may remain sluggish for some time. Consumer prices rose at an alarming rate. The economic slowdown is restraining inflation that could not accommodate real consumer demand at high price level.
The consumer price index rose 0.2% in April from a month.Earlier, the price level increased by 3.9% from a year as the Labour Department stated. The risk of inflation is not gone yet. The economic situation of U.S.is going back to the stage of the early 1970s, when explosion was on oil price. The past history of U.S.economy showed that inflation started creeping more than 2% in the mid-1960s and soared in 1970s.due to oil crisis and it exceeded to 14% in 1980.
The Federal Reserve, in this circumstance, must show its talent against inflation and inflationary pressure in the national economy. This has to be very urgent to think over. Otherwise, we may go back to the stage of 1970s.Worse, we are this moment supposing to experience the economy at the level or state of developing countries like Nepal.
The slack in labour and product markets weakening in economic activity may put result downward pressure on inflation. The latest inflation scenario exhibited weaker consumer demand, car price level falling down, lodging price down and cutting back on travel expenditure.
Food prices rose 0.9% in April from a month earlier. The fastest increase in 18 years reflected the high price level in the U.S. economy. Mostly, the immigrants are the real suffers from rise in price level of daily consumption goods and services. Immigrants observed consumer market that a gallon of milk costing $2 has gone up to $ 3.49 and a bag of 5 kg.rice costing $ 11 rose to 24 within a year and so on.
It is very upset to all - the people of America and immigrants – in uprising price level of daily goods and services in the consumer market. More than 75% American people considered the economy crept slowdown in the USA because of war in Iraq and rise in gasoline price globally. Also, energy prices are primarily caused to fuel in consumer market.
Hence; war in Iraq should be shortened or ended as soon as possible. The national economy urges to timely reform through the appropriate fiscal and monetary measures. The economists of the United States must come forward to solving undesirable economic recession and inflation with new and innovative economic thought and theory. The government ought to be mindful in this respect. The image of the United States of America should always remain as a heaven of the earth as the people of the world would think.
At present, the situation in the United States has been changed due to time factor and effect of global economy. The US economy is suffered by terrorism, Iraq war, gasoline price rise, unemployment .Critically, housing values and stock prices have gone down to worse situation.
The average price level of gasoline in the US market reached to $ 4.03.The price of the gasoline is fluctuating day by day as a rising tendency of price level. Some economists are claiming that market conditions have improved in recent months, but are not coming to normal. After reviewing the retail sales data, economists at Global Insight predicted the government would increase GDP to 1 % at an annual rate. Further, consumer spending will be partially increased due to tax rebates and stimulates checks. The US economy is badly under recession warning scenario held about the risks.
The credit crisis and energy cost are threats to the US economy. A general definition of recession shows the negative GDP.The National Bureau of Economic Research states that a recession is defined as a period of significant decline in economic activity across GDP, income and retail sales that take the period of a few months more.
In a latest survey conducted in the month of May, the recession was gone down by 62.7% from 70 %.We have claims for unemployment benefits recorded to rise up 400,000 a week in May during recession.
The US economy environment is similar to the early 1990s.The Central Bank started cutting the federal funds rate, at which banks lend from 5.25 % in September to 2% .The Fed officials or survey stated that U.S.economy may remain sluggish for some time. Consumer prices rose at an alarming rate. The economic slowdown is restraining inflation that could not accommodate real consumer demand at high price level.
The consumer price index rose 0.2% in April from a month.Earlier, the price level increased by 3.9% from a year as the Labour Department stated. The risk of inflation is not gone yet. The economic situation of U.S.is going back to the stage of the early 1970s, when explosion was on oil price. The past history of U.S.economy showed that inflation started creeping more than 2% in the mid-1960s and soared in 1970s.due to oil crisis and it exceeded to 14% in 1980.
The Federal Reserve, in this circumstance, must show its talent against inflation and inflationary pressure in the national economy. This has to be very urgent to think over. Otherwise, we may go back to the stage of 1970s.Worse, we are this moment supposing to experience the economy at the level or state of developing countries like Nepal.
The slack in labour and product markets weakening in economic activity may put result downward pressure on inflation. The latest inflation scenario exhibited weaker consumer demand, car price level falling down, lodging price down and cutting back on travel expenditure.
Food prices rose 0.9% in April from a month earlier. The fastest increase in 18 years reflected the high price level in the U.S. economy. Mostly, the immigrants are the real suffers from rise in price level of daily consumption goods and services. Immigrants observed consumer market that a gallon of milk costing $2 has gone up to $ 3.49 and a bag of 5 kg.rice costing $ 11 rose to 24 within a year and so on.
It is very upset to all - the people of America and immigrants – in uprising price level of daily goods and services in the consumer market. More than 75% American people considered the economy crept slowdown in the USA because of war in Iraq and rise in gasoline price globally. Also, energy prices are primarily caused to fuel in consumer market.
Hence; war in Iraq should be shortened or ended as soon as possible. The national economy urges to timely reform through the appropriate fiscal and monetary measures. The economists of the United States must come forward to solving undesirable economic recession and inflation with new and innovative economic thought and theory. The government ought to be mindful in this respect. The image of the United States of America should always remain as a heaven of the earth as the people of the world would think.
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