The U.S. Economy

The United States has one of the most productive economies in history and leads the world with fast growth but was hit hard in 2001 with a recession and terrorist attacks. Since that time the economy has been moving slow but is on a definite rise. According to Bloomberg.com, Greenspan says that “U.S. economic growth is picking up”. Despite the rising economy, there is still a high unemployment rate which many refer to as a “jobless recovery”. Fortunately, in August 2004, the unemployment rate is finally decreasing.

In August the economy added 144,000 jobs and the unemployment rate dropped from 5.5 percent in July to 5.4. (Andrews) Manufacturing companies are slowly adding jobs after terminating nearly two million jobs over a three year period. Employment in professional and business services also expanded by 32,000; educational and health care by 45,000; and Government jobs increased by 24,000. (Andrews) Although there was a large increase in jobs there are still about one million fewer jobs then in January 2001. (Andrews)

In the second quarter of 2004, real gross domestic product (GDP) increased by 2.8 percent. (BEA) This was due to an increase in personal consumption, private inventory investment, government spending, and residential fixed investment. Despite this increase, real GDP grew 1.7 percent less in the second quarter than it did in the first. (BEA) During the second quarter there was a definite slow down in consumer spending, especially in clothing and food. (BEA)

The chart on the following page illustrates these facts. It also shows how real GDP has changed in the economy since 2000.

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The United States Economy is on the rise. It seems to be a matter of opinion as to how well it is recovering. The additional jobs created in August will help the economy because people who were not earning money before will now have money to spend in the economy. The chart illustrating Real GDP also shows improvement since 2000...