Hi tutor,

So far this is my analysis for a case study regarding unemployment and inflation.

I have chosen two unemployment issues that i would like to discuss and these are: unemployment rate among young college graduates and unemployment rate among women. please see summary of my analysis below.

Analysis

This section contains the following analysis based on the data that was gathered from my understating of GDP rates, inflation, unemployment rate, and the unemployment issues I chose.

Gross Domestic Product

The US Gross Domestic Product (GDP) has seen steady growth over the past ten years. From 2013 to 2022, the US GDP has grown from 16.8 trillion to 22.3 trillion US dollars. This growth in GDP has been supported by strong consumer spending, business investment, and government spending.

In the period 2013 to 2017, the US economy experienced an average growth rate of 2.2 percent in real terms. This was slightly higher than the average growth rate of 1.9 percent in the period 2010 to 2013. The period 2013 to 2017 was marked by considerable economic expansion, driven by rising consumer confidence and low unemployment rates. However, the US economy experienced a slowdown in 2018, with the real GDP growth rate falling to 2.2 percent. This was driven by rising trade tensions and slowing global economic growth. In 2019, the US GDP growth rate slowed further, to 2.1 percent. This was the weakest growth rate since 2011.

The outbreak of the COVID-19 pandemic in 2020 caused a dramatic downturn in the US economy. Real GDP growth rate fell to -3.5 percent in 2020, the steepest decline since World War II. The decline was driven by the decline in consumer spending and business investment, as well as the disruption of global supply chains.In 2021, the US economy is expected to rebound, with growth projected to reach 6.3 percent, driven by fiscal and monetary stimulus. In 2022, the US GDP grew by 4.3 percent.

US Inflation

In the United States, inflation has fluctuated considerably over the past decade, with both periods of high and low inflation. From 2014 to 2019, inflation was relatively low, with the Consumer Price Index (CPI) ranging between 1.5% and 2.5% each year, and the Personal Consumption Expenditure (PCE) Index ranging between 1.3% and 2.3%. This was largely due to the Federal Reserve keeping interest rates at historically low levels, which kept inflation in check.

However, 2020 saw a significant uptick in inflation due to the increase in demand for goods as consumers responded to the COVID-19 pandemic. The CPI rose to 2.6% in 2020, and the PCE rose to 2.4%. This was the highest inflation rate since 2012, and it was largely driven by the increased demand for goods and services resulting from the pandemic.

The effect of high and low inflation rates on GDP is significant. In periods of high inflation, prices for goods and services increase, leading to reduced consumer spending and decreased economic growth. Conversely, periods of low inflation can lead to increased consumer spending, which can boost economic growth. This was seen during the period of 2014-2019, as the low inflation allowed for healthy economic growth during that period.

Unemployment Rate

The United States' unemployment rate has seen several fluctuations over the past 10 years. In 2003, unemployment was at 6.0% and steadily decreased in the following years until it reached a low of 4.4% in 2007. This period of sustained economic growth was a good sign for the US economy, as it indicated a healthy job market and a robust GDP.

However, the Great Recession of 2008 quickly reversed these trends. Unemployment skyrocketed to 9.3% in 2009, which was a jump of almost 5% in only two years. This was largely due to the massive job losses caused by the global financial crisis. This period of high unemployment had a significant negative impact on the US economy, as GDP growth slowed to a crawl and consumer spending decreased significantly.

Since the end of the Great Recession, the US unemployment rate has seen a steady decline back to pre-recession levels. In 2018, unemployment reached a low of 3.9%, which was the lowest rate since 2000. This period of sustained low unemployment was a sign of a healthy economy, as businesses were hiring new employees and consumer spending was on the rise.

However, in 2020 the US economy was hit hard by the Coronavirus pandemic, and the US unemployment rate rose to 14.7% in April. This was the highest rate of unemployment since the Great Depression. The high unemployment rate had a devastating effect on the US economy, as businesses shut down and consumer spending plummeted.

In the wake of the pandemic, the US unemployment rate has declined steadily. As of August 2020, the rate stands at 8.4%, which is still significantly higher than pre-pandemic levels. The recent decline in unemployment is a sign of economic recovery, though it is still too early to tell how long it will take for the US economy to fully recover.

Unemployment Among Young College Graduates

The unemployment rate among young college graduates has been a major concern in recent years. According to the table provided by the Bureau of Labor Statistics (BLS), the unemployment rate for college graduates aged 25 and over has decreased steadily from 2011 to 2023. In 2011, the unemployment rate for college graduates was 5.4%, whereas in 2023 it was 3.2%. This indicates a two-point drop in the unemployment rate from 2011 to 2023.

The trend seen in the table also shows that the rate of unemployment for college graduates aged 25 and over is lower than that for those aged 25 and over with a high school diploma or less. In 2011, the unemployment rate for college graduates was 5.4%, while the rate for high school graduates or less was 8.5%. This gap widened in 2023, with the unemployment rate for college graduates being 3.2%, while the rate for high school graduates or less was 6.2%.

The decreasing unemployment rate for college graduates is a positive sign for the economy. The trend indicates that college graduates are more likely to find employment than those with a high school diploma or less. This is likely due to the fact that college graduates have more job opportunities available to them, and thus are more likely to find employment.

Despite the positive trend in the unemployment rate for college graduates, the rate still remains higher than the overall unemployment rate. In 2023, the overall unemployment rate was 2.7%, while the rate for college graduates was 3.2%. This indicates that college graduates are still more likely to be unemployed than the general population.

The high unemployment rate for college graduates represents a challenge for the economy. College graduates represent the future of the workforce, and if they are unable to find employment, it can lead to a decrease in productivity and economic growth. Furthermore, the high unemployment rate for college graduates can lead to an increase in poverty and social inequality.

Unemployment Among Women

The Bureau of Labor Statistics (BLS) shows that the unemployment rate among women has decreased from 8.1% in 2011 to 6.2% in 2023. This represents a 23.5% decrease in unemployment among women during this period. This is an encouraging trend and suggests that the economy has improved significantly over the past decade.

The table also shows that the unemployment rate for women peaked in 2010 at 9.0% and has been steadily decreasing since then. In 2011, the unemployment rate decreased slightly to 8.1%. This trend of decreasing unemployment among women continued for the next four years, with the rate decreasing to 7.3% in 2012, 6.7% in 2013, 5.7% in 2014, and 5.3% in 2015.

However, after 2015, the rate of decrease in unemployment among women slowed down significantly. In 2016, the rate only decreased slightly to 5.2%. In 2017, the rate decreased to 4.9%, in 2018 it decreased to 4.3%, and in 2019 it decreased to 3.7%. The rate then remained relatively stable in 2020, 2021, and 2022 before finally decreasing to 6.2% in 2023.

The decreasing unemployment rate among women is a positive trend for the economy. Women are an important part of the workforce and their increased participation plays a major role in the economic development of a country. The decreased unemployment rate suggests that more women have been able to find employment, enabling them to contribute to the economy. This is an encouraging development and one that is likely to benefit the economy in the long run.At the same time, however, the decreased rate of decrease in unemployment among women over the past few years can also be seen as a challenge for the economy. Despite the decrease in unemployment rate among women, the rate of decrease has slowed down significantly in recent years. This could be indicative of a lack of job opportunities available to women or a lack of suitable skills among women. It could also be indicative of a lack of support for women in the workforce or a lack of encouragement for women to pursue careers. These are all challenges that need to be addressed in order to ensure that women are able to fully participate in the workforce and contribute to the economy.

Reflection and Critical Thinking

In this section, I'll be connecting together by relating my above analysis to other areas in the macroeconomy. This section will provide changes in overall unemployment, my two chosen unemployment issues, inflation, and GDP to one another and how they impacted each other during periods of economic growth or periods of economic decline.

From the data I gathered and in my analysis, it can be seen that changes in overall unemployment, the unemployment rate among young college graduates, and the unemployment rate among women are all interconnected and can impact each other. For instance, the declining unemployment rate among college graduates is a positive sign for the economy, but at the same time, the fact that the rate is still higher than the overall unemployment rate indicates that there may still be challenges for college graduates in finding employment. This in turn can impact consumer spending, as college graduates may be less likely to spend money, which can lead to a slowdown in economic growth. Similarly, the decreasing unemployment rate among women is a positive trend for the economy, as it suggests that more women are able to find employment and contribute to the economy. However, the slowing rate of decrease in unemployment among women over the past few years can also be seen as a challenge, as it may indicate a lack of job opportunities or support for women in the workforce. This can impact consumer spending and economic growth, as women may be less likely to participate in the workforce if they are unable to find suitable employment.

Inflation also plays a significant role in the economy, as it can impact consumer spending and economic growth. During periods of high inflation, prices for goods and services increase, leading to reduced consumer spending and decreased economic growth. On the other hand, periods of low inflation can lead to increased consumer spending, which can boost economic growth.

Finally, changes in the Gross Domestic Product (GDP) are also interconnected with the other factors discussed above. The growth in GDP over the past decade has been driven by strong consumer spending, business investment, and government spending. However, the slowdown in GDP growth in 2018, driven by rising trade tensions and slowing global economic growth, was followed by a dramatic downturn in 2020 due to the COVID-19 pandemic. The rebound in GDP growth in 2021 and 2022 was driven by fiscal and monetary stimulus.

In conclusion, my analysis highlights the complex interplay between changes in overall unemployment, the unemployment rate among young college graduates and women, inflation, and GDP. Each of these factors can impact the others, and they all play a significant role in the overall performance of the US economy. Understanding these interconnections can help policymakers and businesses make informed decisions to support economic growth and address challenges in the workforce.

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Here's where i need help. i need to come up with a solution.

1. State which macroeconomic policy (monetary policy or fiscal policy) might resolve the issues you highlighted above, and state how this policy could be implemented and why it would solve these problems. (i think government is using a monetary policy? no sure please help)
2. Finally, provide your own solution. Basically, answer the following question. "What would you do to solve the macroeconomic issues you addressed if you were in charge of the U.S. economy?" State why. (i'm thinking of improving monetary and fiscal policies, increase more job opportunities by inviting foreign investors, encourage companies to bring back their manufacturing plants here in the US instead of abroad and give tax incentives to those who do it, create legislative bills for workers) please help

please provide reference if needed.

thanks.