Growth Probably Picked Up in First Quarter: U.S. Economy Preview
Based on first quarter reports, the economy seems to moving in a positive direction. There are many signs that support a gradually recovering economy such as the gross domestic product and various industries’ reports. The gross domestic product this year has shown a jump of 3.1 percent as consumer spending which accounts for 70 percent of the gross domestic product rose 2.8 percent. The automobile industry is one of the strongest industries in the economy right now as averages of 15.3 million cars are sold. The rising stock prices are stimulating the economy and putting more money into the economy increasing consumer spending which further stimulates the economy even more. There is also an increase in home purchases, both previously owned houses and new houses. Previously owned home purchases climbed 0.4 percent and new homes climbed 1.2 percent. Railroad companies are also growing, reporting earnings that beat estimates.
Although the economy is only gradually recovering, if the current rates stay consistent then the economy can continue to grow. Everything that is used to stimulate the economy is like a endless cycle of pouring more money into the economy just so it can be used up again. The rising stock prices are a good example where money is generated in households, who then spend it on goods; the goods increase in demand which also increases the amount of labor needed which leads to the creation of jobs.
Written by: Wilson Tang