Message to the President. Wyatt Benno Nick Hissong Dustin Miller Dare Heisterman. Current Economy. Numbers Provided by BLS for Aug 2010 Unemployment = 9.6 CPI = +.3 Productivity = -1.8 Average Hourly Earning = +.06 GDP =+2.7% 1Q:2010 3 rd revision. Present state of the economy.
Numbers Provided by BLS for Aug 2010
Unemployment = 9.6
CPI = +.3
Productivity = -1.8
Average Hourly Earning = +.06
GDP =+2.7% 1Q:2010 3rd revision
As many of you know, we have faced our longest recession lasting 18 months from Dec 2007 and ended June 2009.
(According to NBER)
GDP = C + I + G + NIX
In a normal scenario we would see Change in C go into investment expenditure due to higher savings.
However in a liquidity trap scenario Investment expenditure does not increase due to a lack of new loans.
At the present moment government expenditure may be supplementing the reduction of Consumption expenditure through fiscal policy.
1) Consumers are saving and unwilling to borrow.
2) Banks are not lending.