II. Macroeconomic Outlook

The current state of the U.S economy is good and positive due to the level of economic activities and stability of the U.S dollar. The critical indicator is the gross domestic product which is expected to remain at 2-3 percent. Inflation or deflation is not too much, and unemployment is at its natural state (Amadeo, 2017). The economists, business, and political leaders project that the U.S and global economy will improve in both the short and long term period. President Trump promised to increase the economic growth to 4%. In the short term period, the global economic activity is expected to increase following the positive continuation of the emerging and developing markets (Lew, 2016). The aggregate economic growth figures and forecasts for 2016 to 2018 have remained largely unchanged. Federal Open Market Committee forecasts that the U.S. GDP growth is expected to increase in the short run as Trump's policies are implemented. The unemployment rate will drop in the long term and short term but with increased number of part-time workers. Inflation will increase with time due to increase oil prices. President Trump promises in creating more jobs hence the U.S. manufacturing industry is set to grow faster and hence improve the economy.

Projected strong financial stimulus in the global economy is positive. In the third quarter of 2016, the global output growth level was estimated to be around 3 percent (Peric & Vitezic, 2016). The stable average growth level reveals the divergent development in the varied nations. Forward-looking metrics such as the purchasing managers’ metrics have indicated a strong global economic outlook. In the long term period, the global economic growth is expected to be stable. The stability of the long-term economic growth is vital in supporting long-term productivity of the businesses.

In the U.S, the economy is expected to grow in the short run. It follows the recovery of the U.S stock exchanges and the expected reduction in corporate taxation. The business confidence in the U.S is high due to the new Trump administration that has raised optimism for a better economic performance (Peric & Vitezic, 2016). In the long term period, the U.S economic growth level is expected to increase due to the favorable business policies rolled by the Trump Administration. For example, the infrastructure investment and funding programs would increase the level of financial transactions in the economy.

The global economy is expected to grow in the short run due to increased economic activities from the developing economies and emerging markets (Special focus, 2017). The U.S economic growth causes the same shock in the global economy therefore enhancing economic growth. The changing policy mix in the U.S. contributes to the to the global growth projections. Fiscal initiatives in the major economies also help in boosting the global GDP growth. A strong economy leads to an increase in business, therefore, it improves the firm’s financial situation. In a growing economy, disposable income increases and there is low unemployment due to increased consumer confidence. Consumers, therefore, put their money back into the economy by buying goods and services. Demand increases and hence there is the need for the firm to employ more workers, expand the retail space and adding new product lines. This will result in increased growth and productivity of the firms resulting in the short term and long term success of the business. In case an economy is slowly growing, it has negative impacts on the businesses. The consumers lose confidence in their job security and spend less in products and services which result in reduced revenue (Special focus, 2017). A business may face financial struggles since it’s unable to pay the creditors due to the low profits. There is increased number of layoffs hence increased unemployment rates.

The economy has a significant impact on TJX’s financial situation. For example, a reduction in the corporate taxation would increase the cash flows for investments in other business ventures (Schwaab, Koopman, & Lucas, 2017). Favorable economic activities would increase the consumer purchasing power that increases the overall profitability and revenue levels at TJX Corporation. As a result, it is important for TJX Corporation to evaluate the financial situation of the company to enhance both the short and long term success.

The TJX Corporation is a retailer of home fashions in the whole world. It uses off-price models together with operational efficiency for its success. TJC Corporation has had increased sales and profitability throughout the years because of their off-price business model SEC, 2010). The flexible off-price business model and inventory management enhance selling their high-quality products at low prices than the regular prices. During an economic recession, the global financial markets are disrupted, and there is credit contraction. This results in increased unemployment rates, and disposable income decreases. The consumer confidence will decrease therefore resulting in small expenditures from the consumers. This will reduce the TJX Corporation sales and the business revenue. The credit markets will affects the cost of capital of the business and sources of liquidity of the business resulting in low financial performance.

In favorable market economic conditions, TJX will have improved performance and increased market performance. Despite TJX operating on the off-price retailer business model, economic factors affect the sales and the performance (SEC, 2010). With favorable economic factors such as reduced unemployment rates, consumer credit availability, reasonable interest rates, good energy costs and reduced inflation and deflation, the consumer confidence will increase. Increased Consumer confidence will increase the sales at the TJX retailers and hence

enhance the revenue of the company. This will ensure that TJX achieves its short term and long term goals.