In general, the economy of most States in the United States of America has been experiencing irregular fluctuations. The observed abrupt economic changes could probably be due to the rapidly changing economic trends of the global economy. These economic changes can also be attributed to changes of economic policies within the United States as well as in the local Federal States as each States adjusts its financial planning to meet the needs of their respective population. As such, each Federal State in the U.S displays its unique economic indicators although the overall feature of such economic indicators can be more or less similar to those of the United State’s national economy (Forgue & Garman, 2011).
In our case, we will digress extensively into the performance of local federal banks with St. Louis Federal Reserve Bank located in St. Louis City serving as our reference local federal reserve bank. St. Louis Federal Reserve Bank shows the key economic indicators in details for the most recent past, thus we can interpret this basic financial information so as to ascertain how the economy is doing currently. Moreover, appropriate determination of the current federal State’s economic situation can give us an insight in prediction of the future economic status of the U.S Federal States as well as for the National U.S economy.
Basically, there are six main economic indicators and these are also the key ones that St. Louis Federal Reserve Banks has highlighted on: because any precise determination of the economic status of any state or nation relies primarily on these six factors. According to St. Louis Federal Reserve Bank, Real Gross Domestic Product (GDP), Consumer Price Index (CPI), Industrial Production and Interest Rates are considered as some of the major economic indicators useful for evaluating the economic status of the States. In addition to the above four economic indicators, the bank includes change in Non-Farm Payroll and Unemployment Rates as significant economic indicators useful determining the national economic trends (Rittenberg & Tregarthen, 2008).
Real Gross Domestic Product is usually the principal factor used in determination of the national economic status through calculation of the States or country’s per Capita Income. However, Gross Domestic Product of the U.S is influenced greatly by aspects of inflation since there are sev3eral factors considered. Some of the factors considered in calculation of the GDP are the country’s foreign investment, imports and exports in addition to local domestic consumption (Clark, 2011). Therefore, precise determination of national economic is based on the Nation’s Real Gross Domestic Product. According to the U.S Department of Commerce: Bureau of Economic Analysis, the current national Gross Domestic Product stood at 2.8 percent which was a large increase from 1.8 percent recorded in the 3rd quarter of 2011.
This indicates that the United States national product and services output experienced a remarkable increase (Garvin, 2011). This was probably due to the significantly reduced U.S current account deficit which was recorded to decrease to $110.3 billions, a decrease of about $14.4 billion in the 4th quarter of 2011. Similarly, the U.S foreign investment was observed to have changed greatly from the 3rd to the 4th quarters of last year. The major reason for such great changes could be attributed to the fact that the value of foreign investment in the U.S was evaluated to have exceeded the U.S investment in foreign countries.
From another perspective, the Real Gross Domestic Product of majority of the United State’s federal States was found to have recorded a significant increase as compared to its value in 2009 and 2010. The real gross domestic product was recorded to be 2.6% and 2.5% respectively. As such, the U.S economic status has been recorded to have improved greatly currently, although a slight decrease was noted during the transition from 2009 to 2010. Therefore, the U.S national economy is expected to rise significantly in future according to positive changes in real gross domestic product (Hitcher, 2011).
Consumer Price Index (CPI) has also been observed to take an upward trend due to the increase in the volume of consumer purchases. Owing to the perceived U.S economic growth, the Consumer Price Index has also increased currently unlike in the past two years. According to the United States Department of Labor Bureau Statistics, purchases of consumer goods such as clothing and food stuff increased two folds from the year 2010 to 2011. Moreover, healthcare, transport, education and energy sectors were observed to improve to an appreciable extend. Therefore, due to the current trends of Consumer Price Index, the economy of U.S is expected to record further growth in the foreseeable future. This will be so because the U.S has established a stable and consistent consumer market. The consumer purchasing power has improved to a high level. The current U.S Consumer Price Index is viewed to as the most impressive compared to that of the previous years (Rittenberg & Tregarthen, 2008).
On the side of Industrial Production, the U.S economy could have experienced a great economic regression if it were not for that rapid improvement in industrial production recorded in 2010. The current industrial production is showing signs of increase in future. This great improvement has contributed significantly to the U.S real gross domestic product.
Interest rates seem to have decreased greatly according to the ten-year treasury statistics. Similarly, the 3-months treasury statistics shows a significant interest rates decline in 2011 contrary to an interest rates increase recorded in 2010. Therefore, this decline in interest rates indicates economic growth.
Consequently, non-farm payroll as well as unemployment changes indicate a significant growth of the U.S economy (Clark, 2011). For instance, the non-farm payroll was recorded to improve particularly in 2011. On the other hand, unemployment rate decreased greatly during the same year. Basically, increase in non-farm payroll accompanied by decrease in employment rate indicates economic growth.
In general, U.S economy is doing perfectly good. This is due to the evidence provided by the six major economic indicators. That is, increased real gross domestic product, Consumer price index and industrial production (Garvin, 2011). In addition, interest rates and unemployment rates are currently low with non-farm payroll hitting the highest mark.
Therefore, the economy of the U.S is experiencing significant economic growth. If the current economic trends are maintained, it appears U.S will enjoy a flourishing economy. However, it is important to note that, unless much effort is made to streamline the U.S economic growth: the current economic indicators may change their trends unexpectedly. Highly effective economic strategies are required to ensure sustainable national economy.
Finally, the U.S economy has realized a steady and consistent growth trends particularly in 2011. Therefore, the current impressive national economic growth is expected to be experienced in the future. In fact, great economic growth is anticipated in the next few years according to current trends of economic status. As such, a healthy economy will be the ultimate result of the United States endeavor to create a stable national economy with significant impact on global economy.
References
Clark, C. L., (2011). The American Economy: Historical Encyclopedia. Santa Barbara: ABC-CLIO Press.
Forgue, R., & Garman, T., (2011). Personal Finance. Stamford: Cengage Learning.
Garvin, P., (2011). The United States Government Internet Directory 2011. Lanham: Bernan Press.
Hitcher, J. R., (2011). Financial Valuation, + Website: Applications and Models. Hoboken: John Wiley & Sons, Inc.
Rittenberg, L., & Tregarthen, L., (2008). Principles of Microeconomics. New York: Flat World Knowledge.