Economics: Assessment of US economy - Report, Module: Macroeconomics

This report provides an assessment of the US economy, focusing on the performance of the labor market, which has seen a decline in the unemployment rate to 4.1 percent. It examines factors influencing economic growth, including the acceleration of wages and the recent increase in labor force participation. The report also considers potential challenges, such as the deceleration of economic growth, the impact of trade wars with China, and the implications of fiscal deficits and debt. It highlights the importance of the inflation rate and provides references to support the analysis. The report aims to give a comprehensive overview of the US economy.

Runnning head: ECONOMICS
Economics
Name of the Student
Name of the University
Course ID

1ECONOMICS
Table of Contents
Assessment of US economy.......................................................................................................2
References..................................................................................................................................3

2ECONOMICS
Assessment of US economy
The economy of United State is currently at good position. The favorable condition of
the labor market is particularly reflected in the performance of labor market. The
unemployment rate has declined to 4.1 percent, the lowest since 2000. Wages in recent years
have accelerated and is expected to accelerate further (federalreserve.gov., 2019). After two
decades of sharp decline in labor force participation rate there is now a significant
development in labor force participation. The robust job market growth has helped to regain
consumers’ confidence to the pre-crisis level. The economic growth in the US economy was
likely to decelerate at the fourth quarter of 2018. In the December quarter, there was an
unexpected fall in retail sales. Along with this, home sales declined to three years’ low. The
lower industrial production signals a weak manufacturing growth. The economy is facing
prospect of a slower growth because of multiple headwinds including declining fiscal
stimulus and a relatively lower global growth (Benhabib & Spiegel, 2018). The accelerated
trade war with China presents a downside risk to economic growth. The large fiscal deficit
along with high corporate and personal debt add vulnerabilities to future economic growth.
The inflation rate however remained at a relatively low and stable level.

3ECONOMICS
References
Benhabib, J., & Spiegel, M. M. (2018). Sentiments and economic activity: Evidence from US
states. The Economic Journal, 129(618), 715-733.
federalreserve.gov. (2019). Speech by Vice Chairman for Supervision Quarles on an
assessment of the U.S. economy. Retrieved from
https://www.federalreserve.gov/newsevents/speech/quarles20180226a.htm