United States Economy on the rebound Essay Example for Free

United States Economy on the rebound Essay Forbes. com reported that the United States economy recovered from an economic slump by 3. 4 percent in this year’s second quarter. It is reportedly a highly-favored performance in more than a year. The major force believed to be the largest attributing factor to this economic resurgence is the reinforcement of business spending. (AVERSA, 2007) The 3. 4 percent growth rate is said to be a bit higher than the 3. 2 percent estimated by Wall Street. (Daily Times , 2007) Despite the seemingly favorable pace, analysts predict that this show of strength may not continue for the rest of the year. The economic upswing can be credited to the rise of exports, a significant improvement in the global business scene, and a decline in consumer spending. Exports have reportedly grew to 6. 4 percent while imports dropped by 2. 6 percent. (Daily Times , 2007). Consumer expenditure is one of the factors that fuels economic expansion. However this component does not have too much of an impact. End user spending went up only 1. percent as opposed to 3. 7 percent in the first quarter. It is reportedly the weakest since late 2005. (Daily Times , 2007) The real estate sector also experienced a dip as real estate investments fell to 9. 3 per cent although not as low as the first quarter dip of 16. 3 per cent. Analysts are predicting that there are certain risks as brought on by this development. This is because the drop in real estate investments may have impacts of still unknown nature (Daily Times , 2007). Inflation rate is also among the meter sticks of economists. Inflation rates are better from the 2. 4 percent in the previous quarter to only 1. 4 percent in the next quarter; this is said to be the slowest rate since 2003. (Daily Times , 2007) It is expected that the American people will have more buying power resulting from the better condition of the economy and of the United States dollar’s show of strength. Personal incomes of the American people have increased by . 40 per cent or $47. 3 billion. Disposal personal incomes climbed up to $37. 6 billion or . 0 per cent according to the Bureau of Economic Analysis or the BEA. (Armah Rankin, 2007) Wages and salary payments have increased to a high $24. 9 billion in May. This is in stark contrast to the dip of $36. 4 billion in April. (Armah Rankin, 2007) In addition to the above factors, the real gross domestic product or the yield produced by industries and property in the United States, went up to 3. 4 per cent per annum. Elements that caused this increase in the GDP include upbeat inputs from personal expenses for services, exports, and nonresidential structures. Also lending a hand were federal government spending, state and local government expenditure. (Mannering, 2007) The uphill inclination of the economy will cause improvements in the financial stature of many Americans. Analysts and ordinary people alike expect that more and more people will be confident in their finances such that they will be able to afford more luxuries. This may cause a change in the lifestyle of many Americans. Banks are always on hand to offer loans that many people think will help alleviate their financial situation. People should be wary of this and be aware of the impact that interest rates may have on their finances, should they start to fail in making payments. In spite of the uphill trend of the economy, business analysts are hopeful but are still watchful of the possible outcome. Notwithstanding this positive development of the economy, it is still and always advisable to be careful of one’s spending habits. People should take advantage of the financial freedom that this economic condition will lend so that they can prepare for their future. Instead of spending a big portion of their hard-earned money on luxuries that will gradually deplete their monetary reserves because of expenditures such as taxes and depreciation, people should make it a habit to set aside a sum of money for investment instruments. Investment instruments such as pension plans, trust funds that will help them maximize their money’s earning potential and help them secure their future or make it easier for them to afford other comforts such as leisure trips out of the country or a new vacation home. Whatever state the economy is in, it is always wise to plan for the future. Those who are new in investing can seek the help of professionals who can aid them in making the right investment decision. One must always take advantage of investment tools that will help him enjoy and maximize the benefits of his hard-earned money. It is also important that people learn to stay debt-free. If they are already in debt, they should seek help of financial advisers on how to get out of debt in such a way that they can still live a comfortable life.