Thursday, March 08, 2007
Most of US sees 'modest growth'
Some parts of the US reported slower economic growth in February, as firms battled the fallout of problems with the housing and auto industries. The contraction came as firms cut their inventories and consumers spent less. However, the Federal Reserve's Beige Book showed that most parts of the US experienced modest growth.
Most of the districts said that there was little change in prices, and that pay increases "generally remained moderate" despite the job market staying healthy in most parts of the country. Such observations indicate that inflation is not growing - good news for the Fed which is aiming to slow the economy enough to curb inflation but not enough to cripple economic growth.
Read the full story at: http://news.bbc.co.uk/1/hi/business/6428707.stm
Falls in consumer borrowing and firm inventories, will depress GDP. Conversely, rises in consumer and investor confidence will tend to increase GDP. In some regions of the US, the latter is the case, and in other regions the former. Interest rate rises designed to cool growing areas may have adverse effects in areas not so well favoured. This points to an important policy dilemma in a monetary union.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. Chapters 4 and 9 (at principles and intermediate level, respectively) describe the various components of aggregate demand and illustrate the determination of national income. Chapters 7 and 16 at principles and intermediate level, respectively, describe the workings of the labour market, in particular the link between wage and price inflation. Find out how to get LiveEcon at http://www.liveecon.com/. Download this blog as a Blogcast via the website.
Some parts of the US reported slower economic growth in February, as firms battled the fallout of problems with the housing and auto industries. The contraction came as firms cut their inventories and consumers spent less. However, the Federal Reserve's Beige Book showed that most parts of the US experienced modest growth.
Most of the districts said that there was little change in prices, and that pay increases "generally remained moderate" despite the job market staying healthy in most parts of the country. Such observations indicate that inflation is not growing - good news for the Fed which is aiming to slow the economy enough to curb inflation but not enough to cripple economic growth.
Read the full story at: http://news.bbc.co.uk/1/hi/business/6428707.stm
Falls in consumer borrowing and firm inventories, will depress GDP. Conversely, rises in consumer and investor confidence will tend to increase GDP. In some regions of the US, the latter is the case, and in other regions the former. Interest rate rises designed to cool growing areas may have adverse effects in areas not so well favoured. This points to an important policy dilemma in a monetary union.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. Chapters 4 and 9 (at principles and intermediate level, respectively) describe the various components of aggregate demand and illustrate the determination of national income. Chapters 7 and 16 at principles and intermediate level, respectively, describe the workings of the labour market, in particular the link between wage and price inflation. Find out how to get LiveEcon at http://www.liveecon.com/. Download this blog as a Blogcast via the website.
# posted by Sam @ 11:59 
