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What is the state of the US economy?
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This is an exceedingly difficult question to answer as there are multiple ways in which to measure an economy’s performance and because there is a tremendous subjective element to how we should define what a good economy is as opposed to a bad economy.
By many measures, the economy of the United States is improving but is doing so somewhat slowly. For example, gross domestic product in the United States is rising. The US is not in a recession. However, the rate of growth of GDP has been lower than it was at many times in the 1990s. As another example, the unemployment rate in the country has been declining in the last few years. However, it is still much higher than it ever was at any other time in the last decade (before the crash of 2007-8). As another measure of the economy’s state, inflation is low and is actually low relative to what it was in past years. Still another measure is productivity. The productivity of the US economy has generally been growing in most quarters for the last few years.
This shows us that various measures indicate that the economy is improving. But what does that say about the state of the economy? If a person believes that the US economy should be growing at a higher rate and that unemployment should be dropping faster, the economy is in very bad shape. If a person believes that relatively slow growth is acceptable, then the economy is in acceptable shape. This is a subjective judgment.
Thus, we can objectively state what trends are occurring in specific measures of the US economy. However, there is no objective answer to the question of what the state of the economy is.
Posted by pohnpei397 on January 23, 2013 at 4:50 PM (Answer #1)
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