Question
Three macroeconomics goals of every economy consist of economic growth, lower rates of unemployment and price stability. The major statement stated is the unemployment rate
Three macroeconomics goals of every economy consist of economic growth, lower rates of unemployment and price stability.
- The major statement stated is the unemployment rate remained stable which is 5% in Jan and the employemnt rate went up by 0.8% montly basis and the job market secured 150000 new positions which was forecasted by Labor Force Survey to be merely 15000. This increased in securing jobs results in consumer spending which effects the economy in positive way and causes a boost in rate of economic growth.
- The participation rate grew evidently and stood at 65.7% because the number of immigrants increased causing more people looking for a job or who have started working for the position.
- Major statement is that most unemployed people were not having jobs for an abbreviated (short)period (63.9%) and also the long-term unemployment rate decreased around 3% compared to Jan 2022 in Jan 2023.
- Employment incurred in six main industries among which retail and wholesale trade lead the list and grew by 2% which states that these industries experienced growth and thus employed more people.
- The interest rates kept increasing causing people to caution down and aiding the housing market to cool down which was highly volatile and thus, interest rate stood at 4.5% increasing consequently, at the very end affecting the economic growth rate of Canada for 2023.
The surge in employment and strong rise in hours worked in January suggest that GDP growth will be stronger than anticipated this quarter. However, the decline in wage growth means that unexpected strength is unlikely to prompt the Bank of Canada to switch back to hiking mode.
Savings increased than what were expected or estimated which is not a very good sign as consumer spendings tend to cause a push in growth rates while, less spending causes inflation and thus a mild or moderate inflation is expected for 2023 and according to the facts unemployment rate will rise up in the year end, however it will not be significant as there is labor shortages in market. Growth rates are expected less as 2023 will have effects of the year 2022 and thus, the recovery results will be seen in 2024.
Personally I view it as- the interest rate increased to 4.5% and thus, the monetary policy is demanding for less consumer spendings and thus, the businesses experience a low sales volume leading to rise in unemployment and eventually prices to come down and thus 2023 will forecast moderate inflation and unemployment and a lower growth rate of GDP but eventually price stability will occur in 2024 and the economy will be back on track. The year 2023 will be similar to 2022 however, 2022 started off well but ended not being stable, while 2023 will be more stabilized by year end and 2024 will have all the positive effects.
Are you agree or not? why or why not?
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