The Economy of the United States

THE ECONOMY

The economy of the United States is in the process of recovery from the recession of 2002-2004. This recovery has been a period of slow growth for the U.S. economy, proving that our economy in the best position yet has not failed and is improving. There are several economic indicators that help track the current economic conditions and recovery. These indicators include the Dow Jones Industrial Average, unemployment rate, Consumer Price Index, and the Productivity and Costs indicator.

Currently the Dow Jones has been operating between 10,300 and 10,800. This value is up from 2004 when the Dow was operating below 10,000. The Dow Jones Industrial Average is the economic indicator most investors follow. The Dow Jones is the best indicator in following the industrial stocks in the United States. Since the Dow Jones has been up, this also means industry in the U.S. has also been on the rise and growing.

The unemployment rate is the percentage of work eligible Americans seeking employment, but have not been successful. The current unemployment rate in the U.S. is 5.2%. American economists believe having the unemployment rate between 4% to 5% reflects a good economy. Having a rate at 5.2% is just beyond this range. This indicates that the U.S. economy still has room for improvement, yet the economy is doing well and will continue to get better.

The Consumer Price Index, better known as CPI, demonstrates variations in prices of consumer goods. CPI is used to monitor inflation. This means if CPI increases, increasing the prices for everyday consumer goods, inflation is present. The key to keep inflation from rising is having a growing productivity. The latest Consumer Price Index report for 2005 showed a 0.1% increase, a lower increase than that of productivity. Thus currently the U.S. economy is experiencing a small inflation.

Productivity and Costs is an economic indicator that represents the output of the United States work force. Having high productivity means a strong economy is present. The latest reports show productivity has increased 0.8% and has been growing over the past several years. Having a continual increase in productivity is key to maintaining a growing economy in the United States.

The U.S. economy was the envy of the world during the 1990s as industry and stocks grew at unprecedented levels. Beginning in 2000, along with the events of September 11, 2001, the U.S. economy began a three year recession. Since the recovery began in 2004, the economy has grown due to the decrease in unemployment and an increase in productivity. Consumers are once again feeling assured about investing in American Industry.

The war in Iraq weighs heavily on the U.S. economy. In history, the U.S. economy has seen growth during times of war. This war though has not entirely benefited the economy. Iraq is oil supplying country