The first week of the year has brought chilling temperatures and stocks and weaker estimates for the 4th quarter.Before monday the economy appeared as if it was going to finish strong with an initial estimate of a 2% increase of the GDP in October through December. These estimates are dropping quickly beginning monday morning. The Federal Reserve of Atlanta states that number is closer to .07% from their initial 1.3%,Jp morgan has cut their estimate in half from the predicted 2% to now 1%.If these estimates play out it would mean that the economy in 2015 would finish in relatively the same state in which it began the year. The GDP has grown 0.6 in the first quarter of 2015 before bouncing back in the summer and spring. The production of cars, the opening of restaurants and recently the growth in home purchases have been key to supporting the economy in 2015 the same cannot be said for the global economy as as the domestic energy sector has been cutting into demand of american factories.
It is disheartening to hear that the predictions for the increase in percentage of the Gdp of the U.S was not as expected, perhaps ending on an optimistic note gave birth to these distant estimates.However you cannot underplay the increase of the gdp with numbers that large.In fact 0.01% is still over 1.5 billion dollars and as long as the economy is finishing on a somewhat positive note it should be held to value whatever the size.
Thursday, January 7, 2016
Wednesday, January 6, 2016
National Debt What does it mean to you
The United States is over 18 trillion dollars in debt and is obviously increasing at an alarming rate. This does not mean much to the average american, when you inform someone that the national debt is out of control and is currently increasing stopping for nothing this is not anything new but we have had the fact that we are in a an absurd amount of debt it beaten into our head it numbs us after a while a is usually now disregarded
as it is constantly remarked. The average american family in the bracket of 30,00-250,00 has heard the deficit numbers so often they mean nothing to a financially uneducated population. The national debt for the american taxpayer is $157,183 the interest per citizen is $7,520 simply interest. The federal budget for the United States is 40 trillion with a built in deficit of 474 billion. The largest expenditures are medicare/cade at 1 trillion, social security at 888 billion, and the defense budget at 583.5 billion. The interest americans are currently paying for the national debt would fund many valuable programs for americans.
as it is constantly remarked. The average american family in the bracket of 30,00-250,00 has heard the deficit numbers so often they mean nothing to a financially uneducated population. The national debt for the american taxpayer is $157,183 the interest per citizen is $7,520 simply interest. The federal budget for the United States is 40 trillion with a built in deficit of 474 billion. The largest expenditures are medicare/cade at 1 trillion, social security at 888 billion, and the defense budget at 583.5 billion. The interest americans are currently paying for the national debt would fund many valuable programs for americans.
U.S. Federal Reserve Raises Interest Rates
On December 16th for the first time in almost a decade, the United States Federal Reserve has raised interest rates by .25 percentage points. (First time since 2006)
It is said that this is a positive sign of faith in that the economy has since recovered from the financial crisis.(I am assuming the recession they were not specific). This is due to strong growth in household spending.(Household spending is the amount of final consumption expenditure made by resident households to meet their everyday needs, such as: food, clothing,durable goods (notably, cars), health costs, housing (rent), energy, transportation, leisure)and buisness fixed investment that gave birth to the decision.It was not all good news though.The Federal Reserve has seen that inflation remained below the goal of 2% due to the sharp decrease in energy prices, It remained fairly confident that this percentage would eventually rise to 2% in the long term. The risks associated with unhastily growth in markets overseas. In the midst of the announcement stocks markets around the world were positive, Dow Jones up 1.3%,CAC 40 Paris rose 2.2%,The Uk up 1.5%,Japan up 1.6%. Banks were also quick to respond, Jp Morgan, Citibank and Wells Fargo have now increased their base lending rate to 3.5% for loans rather than 3.25,The price of commodities have reacted slightly by the change rising and falling back down.The U.S dollar Interest rates are not considered beneficial to stock markets as lending becomes more difficult, This has given the economy a bit of inflation as countries who have borrowed in dollars will have a more expensive debt.
Its encouraging to see economic movement and risks taken with the stock market as there is more "wiggle room", as they are able to make mistakes whereas before the mistakes made were very costly and harmful to stocks.
It is said that this is a positive sign of faith in that the economy has since recovered from the financial crisis.(I am assuming the recession they were not specific). This is due to strong growth in household spending.(Household spending is the amount of final consumption expenditure made by resident households to meet their everyday needs, such as: food, clothing,durable goods (notably, cars), health costs, housing (rent), energy, transportation, leisure)and buisness fixed investment that gave birth to the decision.It was not all good news though.The Federal Reserve has seen that inflation remained below the goal of 2% due to the sharp decrease in energy prices, It remained fairly confident that this percentage would eventually rise to 2% in the long term. The risks associated with unhastily growth in markets overseas. In the midst of the announcement stocks markets around the world were positive, Dow Jones up 1.3%,CAC 40 Paris rose 2.2%,The Uk up 1.5%,Japan up 1.6%. Banks were also quick to respond, Jp Morgan, Citibank and Wells Fargo have now increased their base lending rate to 3.5% for loans rather than 3.25,The price of commodities have reacted slightly by the change rising and falling back down.The U.S dollar Interest rates are not considered beneficial to stock markets as lending becomes more difficult, This has given the economy a bit of inflation as countries who have borrowed in dollars will have a more expensive debt.
Its encouraging to see economic movement and risks taken with the stock market as there is more "wiggle room", as they are able to make mistakes whereas before the mistakes made were very costly and harmful to stocks.
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