The Current Status of the U.S. Economy: The End of Crisis as the Beginning of Long Recovery, Essay Example

The year 2009 in the United States was marked with the gradual slowdown of the national economy. Consumer spending, GDP, and employment rates decreased, and the state tried to develop strategies and policies to support the country during the hard times. By the end of the third quarter of 2009, however, the state of economy in the United States had slightly improved. Markets and economic systems revealed the signs of relative stability, creating a positive momentum for businesses and consumers and signifying the turning point in the series of dramatic economic failures. The current status of economy in the United States can be briefly described as ‘stable’: businesses and consumers are becoming more optimistic in their expectations, while economic systems and markets gradually move out of the economic abyss; but it would be fair to assume that the economic recovery for the United States will not be easy, nor will it be quick, and the country should prepare itself to a long and painful road to economic stability in the long run.

The third quarter of 2009 became a turning point in the development of the economic crisis in the U.S.: for the first time during the year, America experienced a slight economic expansion which, actually, marked the long anticipated end of the economic decline (On Point, 2010). GDP finally grew at almost 2.8 percent, while personal income grew by almost 0.1 percent (BEA). Much of the discussed stability and relative growth came as a result of federal stimulus funding (On Point): the American state invested huge financial resources to support its economic activity through hard times. Positive returns, however, were not slow to arrive and reflected in better consumer spending, increased government spending, improved residential investments, and improved net investment in private inventories (On Point). As a result and under the influence of numerous economic initiatives, consumer spending by the end of 2009 increased almost 2.9 percent, and residential investment finally ended a string of 15 consecutive quarterly declines (On Point). Non-residential fixed investment and the net change in private inventories are likely to become the two most important drivers of GDP growth in the nearest time.

That the economic slowdown became detrimental to the stability of labor markets in the U.S. is difficult to deny. Despite relative stability, unemployment remains one of the major economic problems in the U.S. In its current state, the U.S. economy is associated with long-term unemployment: statistically, about four in every ten of the unemployed Americans have been without a job for more than 27 weeks (The Economist). The problem is not only in unemployment itself but is in that unemployed workers tend to forget their skills. In the context of extensive market restructuring, the success of the major labor initiatives will depend on how well workers accept the need for additional training and education: new skills will give them a better opportunity to find prospective employment in the new markets.

The general outlook for the U.S. economy is mostly positive: “the acute phase of the financial crisis has past and a global economic recovery is underway” (The World Bank). The World Bank predicts that 2010 for the U.S. as well as for the rest of the world will be difficult: the recovery is likely to be slow and the stability – fragile. The pace of recovery is likely to slow down in the second half of 2010, as the fiscal and monetary measures will, most probably, wane (The World Bank). Nevertheless, it is clear that the current status of the U.S. economy is closely associated with cautious optimism and positive expectations about the future.

Conclusion

The current status of economy in the U.S. is associated with cautious optimism and relative stability. Slow growth of GDP and consumer spending signify the end in the series of consecutive failures during 2009. Much of the discussed growth came as a result of excessive federal stimulus funding, although unemployment is still a problem for the United States. Businesses and consumers should prepare themselves for a long, difficult, and at times, troublesome process of long-term economic recovery.

Works Cited

BEA. “National Economic Accounts.” 2010. Bureau of Economic Analysis. 01 March 2010. http://www.bea.gov/national/index.htm#personal

On Point. “United States Economy Overview Winter 2010.” 2010. On Point: Americas Research. 01 March 2010. http://www.areadevelopment.com/article_pdf/id27298_UnitedStatesEconomicOverview2010.pdf

The Economist. “The Trap: The Curse of Long-Term Unemployment Will Bedevil the Economy.” 2010. The Economist. 01 March 2010. http://www.economist.com/displayStory.cfm?story_id=15271079

The World Bank. “Prospects for the Global Economy.” 2010. The World Bank. 01 March http://web.worldbank.org/Wbsite/External/Extdec/Extdecprospects/Extgblprospects/0,,menuPK:615470~pagePK:64218926~piPK:64218953~theSitePK:612501,00.html