Economy Crawls, Raising Recession Fears

The author of this article, Jeannine Aversa, is stating that key economic indicators point to the likelihood of a recession. Aversa supports her thoughts by noting the real GDP; crawled at a 1.3 share pace in the opening quarter of 2007…even weaker than the hibernating(a) 2.5 percent tramp in the closing quarter of rifle year. The author suggests the main cause of the economic slow mickle is collectible to the housing slump. Consumer expenditures are driving the miserliness, but Aversa worries about a fallout from risky mortgages and rising energy prices. Uncertainty of the Feds actions concerning the fill rates is leading(a) to lower investment spending. The author as well as states that the Feds decision on raising or lowering the participation is due to the fact that inflation has risen and economic ontogeny is increasing at a diminishing rate. The CPI which is the leading indicator of the inflation rate is mentioned in this article, the author shows that the Consumer harm Index rose at a 2.2 percent rate up from a 1.8 percent growth in the coda quarter. Government spending is noted as slowing down because of the decrease on federal defense spending. Consumer expenditures are staying severe at a 3.8 percent rate. The author ties this consumer spending to the increase in employment.



The economies unemployment rate is at an all time 5 year low of 4.4 percent and workers incomes are up 1.1 percent, hire have not been this high since 2001.
The article describes both the economic theory of how fiscal policy and monetary policy have-to doe with the overall economy. The authors main theory is that the economy is headed for a recession. The text book defines fiscal policy as: Changes in government spending and tax collections designed to chance upon a full-employment and non inflationary domestic output. Government spending is unpretentious and slightly overlooked in the article. The author only hints of the fact that federal government spending on defense is down. another(prenominal) negative factor was a 6.6...If you want to get a full essay, order it on our website: Orderessay



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