Presented to professor D. Mark Oliver
In partial fulfillment of the requirements of Economic Problems
Aug. 7, 2005
Our economy is growing at a solid 3.4 percent annual rate in the second quarter, setting the stage for steady second-half expansion as inventories fell and Midwest manufacturing picked up, government and industry reports on show. The quarterly report on gross domestic product, or GDP, showed core inflation well contained but analysts said there was enough price pressure after nine quarters of growth exceeding 3 percent to keep U.S. interest rates on the rise.
Gross domestic product, the broadest measure of the nation's economy, grew at an annual rate of 3.4 percent in the second quarter, the Commerce Department reported, down from a 3.8 percent growth rate in the first quarter. Current-dollar GDP the market value of the nation's output of goods and services--increased 5.9 percent, or $177.4
billion, in the second quarter to a level of $12,376.2 billion. In the first quarter, current-dollar GDP increased 7.0 percent, or $203.6 billion. The major contributors to the increase in real GDP in the second quarter were personal Consumption expenditures, exports, equipment and software, residential fixed investment, and government spending. The contribution of these components was partly offset by a negative contribution from private inventory investment.
The unemployment rate went from the first quarter of 7,794 to the second quarter of 7,599. The augmented unemployment rate also takes into account jobless people who aren't counted among the officially unemployed because they haven't searched for work lately, but who would take a job if offered one. Call them job-wanters. It adds the job-wanters to the officially unemployed, and divides the sum by the sum of the labor force and the job-wanters.
Consumer spending is the one key to any...