As will continue for another two years. A major

As the new year is upon consumers, it makes those wonder what this year has in store economy wise. The current economic expansion will continue throughout the year. Since the great recession that happened in the US back in 2009, the United States has been continually growing since then. The GDP currently is at its ideal range which is between 2%-3%. because the US economy has been growing I believe it will continue to expand. The main reason why the economy will expand and continue through this year is because of the GDP rate, CPI average, unemployment rate, new home sales and consumer confidence index.   The United States has recovered from the Great Recession,  having forecasters believe that the US expansion will continue for another two years. A major indicator to find out that the economy will expand is GDP, also known as Gross Domestic Product. A way economist found that the US would grow is using the equation GDP=C+I+G+(X-M) which shows what the GDP would be. Each of the variables in the equation present a different meaning. The “C” means personal consumption which means what the consumer spends. The “I” stands for business investment, which includes purchases that companies produce to make personal goods. The “G” is government purchase meaning the sum of what the government spent. The X and M mean exports and import which add or subtract to the GDP. Stated in an article written by The Balance, the United States GDP will rise to 2.5%. With GDP in place, inflation and unemployment is also in the ideal range. (The Balance, 2018)Additionally, another economic indicator comes as CPI, which stands for Consumer Price Index. CPI measures the average change over time in prices paid by urban consumers. It can be used to identify inflation or deflation; inflation can be a rise of average prices through the economy and deflation meaning prices are falling. According to Statista, the inflation rate is said to be increasing to at least 2% throughout 2018. It can be calculated by the equation of exchange which is, M*V=P*Q. If “P”, or price increases the “M”, or money supply should increase also. If velocity or “V” is happening, people will notice a increase in money which will show an expansion of money being spent. This would impact the quantity “Q” to increase due to the demanded product.  (Kiplinger, 2018) (The Balance, 2018)Another indicator is the unemployment rate in the United States. Unemployment is a way to indicate the health of the US economy. According to The Balance, the rate of unemployment will decrease to 3.9%  in this upcoming year; but looking towards the future, the rate will stay around the 4.0% rate. With a rise in unemployment, spending will be decreased; with a low unemployment rate, prices may rise because of salary increase. Unemployment happens in every economy, for an example, Bureau of Labor Statistics show that back in 2009 the lowest unemployment rate was 9.9%. (Trading Economics, 2018)Another reason why the economy will expand is because of new home sales being a major indicator for the US economy in 2018. This will also help the unemployment rate because jobs in construction will open up. If new home sales continue thriving, there will be demand in products for home supplies so retail sales will increase also. Housing sales contribute to the GDP with an average of 15-18%. According to Kiplinger, housing rose in November 2017 by 3.3% and will continue into 2018. (Kiplinger, 2018)Including, another indicator for the United States economy is consumer confidence index (CCI). It is defined by the optimism on the economy where consumers are expressing it through spending and saving. According to economist Lynn Franco, economic growth and confidence will continue into 2018. It is reported monthly which has information on consumers spending intentions in region, age and their incomes. In 2018, this confidence will continue making people feel safe and good enough to spend their incomes and purchases. Consumer confidence index is the most accurate and watched indicator.  During this time, I interviewed restaurant Victoriano’s co owner, Ernesto Argiro. He explained how this past year his business has gone up than previous years because of more advertising around town. He believes the economy has been improving and with the new tax cuts, business will get better; with the tax cuts, it will encourage more people to buy his food. Ernesto believes his business will continue to grow at least 22% given the current trend.In conclusion, the United States economy will continue to expand throughout this upcoming year because the GDP, CPI and unemployment rate is said to be at the good percentage. Also, consumer confidence index and new home sales will continue to rise throughout this year. Studies have shown that the economy will continue for the next two years, the facts are shown that the United States is at a good place for this year and many more years.


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