The Current Economic Situation Essay

The Current Economic Situation Essay.

The Current Economic Situation Essay



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Overview of the Current Economic Situation

The US economy remains the largest and the most influential one in the world since it represents 20% of output the world.  The two factors that contribute to the growth of the US economy include the fact that the country is highly developed and the presence of sophisticated technology.  Services-oriented sectors dominate the economy, which proves to be the engine of the rapid growth of the economy. Manufacturing sector also play a major role in enhancing economic growth since it seconds the service sector.

The well-performing economy of the US nears full employment of its high population.  The policy changes that come with deregulation prospects, which means that the state will not be fully in control of the economy plays a major role in boosting entrepreneurs and consumer confidence. The tax reforms, which tend to favor the small and middle businesses brought about by the newly elected U.S president Donald Trump, will also boost the high economy (Giuliano & Spilimbergo, 2014). 

The private sector remains the main source of job creation in the US economy and currently adding 144,000 new employment opportunities to the citizens.  This means that the highest percentage of the citizens have income securities. This in the process enable them pay taxes thus contributing to the growth of their economy. This means that the US economy does not face unemployment challenges, which hinder economic growth unlike other countries.  The high job creation provided by the economy also results to rise of living standards of the citizens, which is a major measure of a country’s economic growth (Brainard, 2015). 

Analysis of a country’s economic status is also in terms of the level of Human Development Index. The US economy presents a high level of HDI of the US populace. This is because of the high percentage of the literacy rates in the country. This means that the country has a population that is well equipped in terms of skills and knowledge to be productive in economic activities. The high quality of social services like healthcare and transport also ensure that all are able to access the social services hence growth of human development Index. In the process, the US Gross National Product increases thus an expansion of the economy.

Analysis provided by the Bureau of Economic Analysis shows that there is an expansion in the US Gross Domestic Product by 1.9%. Although it was slightly lower than the expected 2.0% by the Focus Economic panelists.  There are expectations that Trump is likely to implement more protection policies, which will favor the US trade activities against other economies.  The implementation of tight labor market policies and the systematic increase in wages will see to it that growth of private consumption accelerates.  The political stability that exists in the state also plays a major role in enhancing growth of the economy. Political stability creates a favorable environment for productive economic activities such as production and manufacturing of goods and their distribution. As a result, there is achievement of economic growth (Brainard, 2015).

The status of the US economy is under threat if some polices as the Anti-trade policies emphasized by Trump take root. This may result to negative impact on the economy in that inflation pressures will increase and an increase in consumer prices.  There is possibility that the US economy may deteriorate with the waves of fiscal easing, monetary policies and the immigration policies if implemented by the president. This result too many uncertainties of the US economic status currently.  This is because if the above policies take root the US economy may face huge debt burdens brought about by the increased inflation. There is likelihood of the US currency decreasing in its purchasing power due to inflation pressures (Williams, 2016).

The Anti-trade policies may result to increased prices of imports to the country, thus the country may lose its stability on the balance of payment.  However, the Anti-trade policies may still contribute to the growth of the US economy by 4% since increase in interest rates of imports will result to strict financial conditions of the US citizens.


Brainard, L. (2015). The US Economic Outlook and Implications for Monetary Policy: A speech at the Center for Strategic and International Studies, Washington, DC, June 2, 2015 (No. 854). Board of Governors of the Federal Reserve System (US)

Giuliano, P., & Spilimbergo, A. (2014). Growing up in a Recession. The Review of Economic Studies81(2), 787-817.

Williams, J. C. (2016). Longview: The Economic Outlook. FRBSF Economic Letter24.

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