http://www.forbes.com/feeds/ap/2010/03/11/personal-finance-us-net-worth_7429532.html
Key Terms:
Mortgage - a conveyance of an interest in property as security for the repayment of money borrowed.
Net worth – the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards.
Business Economics - Business Economics is concerned with economic issue and problems related to business organization, management and strategy. Issues and problems such as the following:an explanation of why firms emerge and exist and expand: the role of entrepreneurs and entrepreneurship; significance of organizational structure; the relationship of firms with employees, the employees, the providers of capital, the customers, the government; the interactions between firms and the business environment
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Description: The economic activity being described here in about how American consumers are slowly regaining their faith in the economy, becoming increasingly more comfortable with spending, and regaining their wealth, in little increments at a time. However, although people are regaining their wealth which is reflected in the amount of consumer spending, the economy is not expected to return to its pre-recession peak until the year 2012 unless other factors push that estimated year back. In the previous two quarters, the gain in economic portfolios and household net work was mush less than it currently is, rising 1.3% in the fourth quarter. In 2009’s second quarter, net worth experienced another increase by 4.5%. Despite these gains, the net worth would still have to rise 21% to return to the net worth peak, before the recession hit, of $65.9 trillion. Stocks rose by 4% and investors in the stock market gained during the fourth quarter, while others, such as holders of 401K retirement accounts seen their balanced retrogress by 2-3% from the ends of previous years.
Analysis: This economic activity is occurring particularly because people are “spending their health to regain their wealth.” Instead of spending their accrued wealth on insuring them to have good health, it is now reversed. People have become so distraught and desperate in the times of this current recessions peak, that they are spending ample amounts of time trying to work to continue to provide for their families and themselves, so that they can maintain their livelihoods and survival. The cost of doing this is contracting or increasing more of their longstanding or new health concerns because of the dearth of sleep and rest they are getting and the accumulating stress they are putting on their bodies and minds. However, the benefits of doing so have generated more money for their family income and, therefore, allowed the consumers to have more money to spend.
Explanation: In essence, this economic activity is occurring because of the personal sacrifices and tole the recession has taken on them personally as well as their families. People are realizing the need to survive and the measure of obtaining substantial survival requires more than relaxing, which prompts them to do something to regain their lost wealth that they previously had before the recession hit. This article laments the loss of peoples’ personal savings and huge decline in income. However, more people are now investing in the stock market to gain their wealth, others are sacrificing their wants to ensure their needs, and others are desperately trying to keep and maintain a decent job by working long hours as much as they can just to sustain their living.
Prediction: I see great potential for a full and healthy recovery of the U.S. economy. At this rate, although there is still an immense amount of work to be done, I do believe consumers will continue to generate their wealth, redeveloping their savings and contributing to the economic growth by spending more since they are now granted more to spend. I hold these beliefs because the net worth percentage rates have steadily increased significantly over the last three consecutive quarters, the new stimulus that the President is working on implementing, and the results that the Federal Reserve have already disclosed about the gradual growth the economy is now undergoing.
Friday, March 12, 2010
Sunday, March 7, 2010
Employment picture not good, but it's been worse
http://forbes.com/device/article.php?CALL_URL=http://www.forbes.com/2010/03/05/jobs-employment-report-markets-economy-skeptic.html
3 key economic terms:
1. Hemorrhage- to lose (assets): a company that was hemorrhaging money.
2. Stock-the outstanding capital of a company or corporation; the shares of a particular company or corporation.
3. Investment- the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.
www.dictionary.com
Description: The economic activity being described points to the ample amounts of job losses during the depth of the recession in late 2008 and the beginning of 2009. However, statistics show that the economic recession is dwindling, slowly coming to a healthy recovery. The unemployment rate was 9.7% for a good amount of time, occasionally increasing. Now, the unemployment rate has dropped in 2010 and just about one million jobs have been created and 100,000 jobs that were lost in 2009. Economists make it a point to state that the economy cannot come out of recession if people do not spend money and buy things. This is not possible if people continueto loose their jobs or suffer severe pay cuts. Therefore, more jobs are being created. Additionally, 36,000 jobs were lost in February, and this sent the stock market soaring.
Analysis: This economic activity is occuring because of the economic resssion we are slowly beginnig to come out and recover from. People are loading their jobs primarily because businesses and companies are not accumulating enough income to generate pay to their employees for their work. Therefore, they are being coerced to lay off and unemploy thousands of people due to the dearth of money being generated within the business or company. Another reason this is occuring is due to the temporary hiring of employers. Full time positions are said to be imminent in this day and age. So, people have to settle for less, which they perceive as better than nothing. Another possible cause to the high number of job losses was the bad, snowy weather forcasted leaving many construction workers, transportation workers and media/IT workers out of work.
Explanation: In essense, the primary reasons for the occurance of this economic activity is due to the low amount of revenue and income being generated into businesses and companies, weather restrictions (snow), the depth of the recession, and temporary hiring of employers for short-terms needed jobs. There is a low amount of revenue and income being generated into businesses because people have no excess money to spend due to their pay cuts or job lay off/unemployment status. Therefore, the demand of many goods and services is minimal to none. In addition, the snow certain areas of the world experienced in 2008, winter/ snowy season left many outside job workers unemployed because they were not able to efficaciously carry out the duties of their work. The phenomenon of temporary hiring began to be widely exercised because employers could either not afford to pay their workers for long term service or because their merchandise was not being in high enough demand for long term employment.
Prediction: I do think the United States economy will come out of the state of recession. I also think the unemployment rate percentage will continue to dwindle. I hold these views because of the progress the economy has already proven to have made since 2008. The unemployment rate would have remained constant or increased since then with no hope for recovery. Also, construstion, transportation, and media/IT workers would still be out of luck on employment, however, they currently are getting more and more jobs contributing to the million jobs that have been created. There are many indications of a healthy recovery and I strongly believe we will see even more progress within the next year or two.
3 key economic terms:
1. Hemorrhage- to lose (assets): a company that was hemorrhaging money.
2. Stock-the outstanding capital of a company or corporation; the shares of a particular company or corporation.
3. Investment- the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.
www.dictionary.com
Description: The economic activity being described points to the ample amounts of job losses during the depth of the recession in late 2008 and the beginning of 2009. However, statistics show that the economic recession is dwindling, slowly coming to a healthy recovery. The unemployment rate was 9.7% for a good amount of time, occasionally increasing. Now, the unemployment rate has dropped in 2010 and just about one million jobs have been created and 100,000 jobs that were lost in 2009. Economists make it a point to state that the economy cannot come out of recession if people do not spend money and buy things. This is not possible if people continueto loose their jobs or suffer severe pay cuts. Therefore, more jobs are being created. Additionally, 36,000 jobs were lost in February, and this sent the stock market soaring.
Analysis: This economic activity is occuring because of the economic resssion we are slowly beginnig to come out and recover from. People are loading their jobs primarily because businesses and companies are not accumulating enough income to generate pay to their employees for their work. Therefore, they are being coerced to lay off and unemploy thousands of people due to the dearth of money being generated within the business or company. Another reason this is occuring is due to the temporary hiring of employers. Full time positions are said to be imminent in this day and age. So, people have to settle for less, which they perceive as better than nothing. Another possible cause to the high number of job losses was the bad, snowy weather forcasted leaving many construction workers, transportation workers and media/IT workers out of work.
Explanation: In essense, the primary reasons for the occurance of this economic activity is due to the low amount of revenue and income being generated into businesses and companies, weather restrictions (snow), the depth of the recession, and temporary hiring of employers for short-terms needed jobs. There is a low amount of revenue and income being generated into businesses because people have no excess money to spend due to their pay cuts or job lay off/unemployment status. Therefore, the demand of many goods and services is minimal to none. In addition, the snow certain areas of the world experienced in 2008, winter/ snowy season left many outside job workers unemployed because they were not able to efficaciously carry out the duties of their work. The phenomenon of temporary hiring began to be widely exercised because employers could either not afford to pay their workers for long term service or because their merchandise was not being in high enough demand for long term employment.
Prediction: I do think the United States economy will come out of the state of recession. I also think the unemployment rate percentage will continue to dwindle. I hold these views because of the progress the economy has already proven to have made since 2008. The unemployment rate would have remained constant or increased since then with no hope for recovery. Also, construstion, transportation, and media/IT workers would still be out of luck on employment, however, they currently are getting more and more jobs contributing to the million jobs that have been created. There are many indications of a healthy recovery and I strongly believe we will see even more progress within the next year or two.
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