5 Factors That Affect The US Economic Outlook

1. Employment- Part of the basis for the US economic outlook is the employment numbers. The number of Americans who are employed, as well as the number of unemployed Americans who apply for unemployment benefits, make up part of the information that the economic outlook is based on. The number of jobs created needs to exceed the number of jobs lost by a substantial amount in the USA for ideal economic growth. In the last few years this has not happened.

2. Housing- The housing market also plays a role in determining the outlook for the economy. In recent years housing prices have dropped, and today many Americans have either lost their homes entirely or find themselves underwater, with a mortgage amount that exceeds the vale of the home even after years of payments. The housing market has rebounded slightly and new construction is up but many homes are still valued far below what they were a few years ago.

3. Business Spending- Business spending is also part of the US economic outlook. Businesses will spend money when the owner is certain about what the future holds. This means company expansions, job creation, and owners who are willing to invest back into the company. When the future is uncertain then most businesses will hold this capital instead, in case it is needed for other purposes.

4. Inflation- The rate of inflation and also the interest rates in place will affect the outlook for the US economy. A healthy rate of inflation and reasonable interest rates are a sign of a thriving economy. Right now interest rates are close to zero in the USA, and the rate of inflation is around the same. Lenders are not lending, even after the bank bailout and all of the taxpayer funds that were supplied to keep the financial institutions in business.

5. GDP- The GDP is part of the US economic outlook. This factor reflects the rate of growth that the economy has seen, and generally double digit growth is ideal. Right now this rate in America is just 2%, which is very low and signals that the economy has not fully rebounded after the crisis a few years ago.

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