The rise in exports was mostly due to a rise in goods (led by industrial supplies and materials). Nonresidential fixed investment increased as a result of increases in all components, headed by equipment. Spending on services (headed by health care) accounted for more than half of the growth in PCE; spending on products fell (led […]
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The US economy will have a recession, but not until 2022. More business cycles will result as a result of Federal Reserve policy, which many enterprises are unprepared for. The decline isn’t expected until 2022, but it might happen as soon as 2023. If the Fed manages to prevent a recession in 2023, expect a
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Because higher interest rates and bond yields are expected as a result of inflation, growth stocks’ promised future cash flows become less appealing. What happens to growth stocks when inflation is high? In the past, high inflation has been linked to lower equity returns. In periods of high inflation, value stocks outperform growth stocks, and
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The Federal Reserve has a so-called dual mission for monetary policy, according to a recent Open Vault post: maximum employment and price stability. Price stability, on the other hand, is frequently perceived as low and stable inflation. The Federal Reserve’s policymakers aim for a 2% inflation rate to achieve the price stability goal. This article
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Australians predicted 4.9 percent annual inflation for the next two years in January 2022, up 0.1 percent points from December 2021. Inflation Expectations in January matched the seven-year high set in November 2021 the highest level since November 2014. What will Australia’s inflation rate be in 2021? According to the latest figures from the Australian
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With current moves to raise the federal minimum wage to $15 per hour, raising the minimum wage has been an issue for decades. There are differing perspectives on whether increasing the minimum wage causes inflation. According to some economists, boosting the minimum wage artificially causes labor market imbalances and contributes to inflation. Other economists point
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Nominal GDP is a measurement of economic output in a country that takes current prices into account. In other words, it does not account for inflation or the rate at which prices rise, both of which might overstate the growth rate. The prices at which all products and services are counted in nominal GDP are
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crisis. The Great Depression, on the other hand, occurred in the United States between 1929 and 1930, and began with a sharp drop in stock indices (Black Tuesday) The Great Depression was significantly worse and had a lot longer lasting impact than the Great Recession in terms of length and depth. The Great Recession lasted
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They claim supply chain challenges, growing demand, production costs, and large swathes of relief funding all have a part, although politicians tends to blame the supply chain or the $1.9 trillion American Rescue Plan Act of 2021 as the main reasons. A more apolitical perspective would say that everyone has a role to play in
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GDP quantifies the monetary worth of final goods and services produced in a country over a specific period of time, i.e. those that are purchased by the end user (say a quarter or a year). It is a metric that measures all of the output produced within a country’s borders. What does GDP stand for,
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