The U. S economy is impacted by many factors that can change it. Some of the factors that can affect it the economy are unemployment, expectations, consumer income and interest rates. Unemployment rate is that percentage of the total labor force that is unemployed but actively seeking employment and willing to work. (Investopedia 2012) From 1948 to 2004 the monthly U.S. unemployment rate has ranged between 2.5% to 10.8% averaging approximately 5-6% .The unemployment rate is considered a lagging indicator, confirming but not foreshadowing long-term market trends. (Investopedia 2012) Unemployment not only affects the U.S economy but also household economy. Without employment there is no income to purchase goods and services, therefore hurting the economy. Households are where the economy starts and with no incoming income there is no outgoing spending.
Expectations refer to how individuals and companies knew the future of certain economic variables, including market prices, individual income, company profit and tax. (eHow.com) Expectations is an integral concept in economics because individuals’ and companies expectations themselves affect the very economic values that the expectations are directed toward.
Consumer income is the amount of income is the amount of income remaining after taxes and living expenses have been deducted from wages. This is the amount of money a person has to spend, save or invest. Consumers’ income (our income as working citizens) can affect the demand for goods. If the income increases for consumers then there is a demand for more goods, thus increasing economy. On the flip side if the income decreases the demand for goods will also decrease. Consumer income is affected by several things such as pay at work, employment or unemployment. For example if a person wins the lottery or even get a pay increase at work they are more likely to