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Unemployment

Unemployment means that people are willing and are actively looking for jobs but they are unable to get the jobs. The level of unemployment in the United States as evident in the graph above was from 2000 to 2001 where it started to rise gradually. From 2002 to 2004, the level of unemployment in the United States started to rise until in 2004 when it started falling. However, the rate started to rise again at an abnormal rate from 2008 to 2011.

The interpretation of the above is that the economy was doing better when unemployment is reducing and vice versa when unemployment is increasing. The recession in 2008 led to increased level of unemployment, and its end saw an improvement of the economy and subsequent reduction in unemployment. The average level of unemployment stands at 6.3% far above the natural average level of 5.0%. It, therefore, means that the average level of unemployment from 2000 to 2016 was unhealthy, way above the natural average.

Inflation

Inflation is a very crucial economic indicator in any nation, and it is the general rise in prices of commodities such that as the prices increase the consumer purchasing power reduces.

From the graph above, the rate of inflation is at almost a constant level from 2000 to 2001 before it starts to decrease from 2001 to 2002. The rate of inflation is at its highest in the mid-2008, and it is at its lowest in mid-2009 where it reaches a level of -2.0%. However, the rate of inflation increases again from 2010 and falls to a rate of 1.0% in 2015 before increasing again in 2016. Recessions of 2001-2002 and 2008-2009 came with a decrease in inflation. A comparison between the rate of inflation and the rate of unemployment reveals a negative relationship such that as unemployment is increasing, inflation is reducing and vice versa. The average from 2000 to 2016 is 2.3% which is above the b2.0% target. A difference of -0.2% is not so detrimental to the American economy.

Interest

The interest rates usually affect a country’s bonds and stocks, either in a good or in a bad way. The interest rates are dropping from 2000 to 2003 which replicates to a low cost of borrowing and ease of borrowing. From 2003 to2007, these interest rates are increasing and rapidly decline from 2008 to 2016 because of the recession. It affects the period 2000 to 2003 in the same way.

When we compare the graph of interest rates and that of economic growth, we realize that at the recession, the economic growth is declining and so does the interest rates. The average interest rates from 2000 to 2016 is 1.9 %. The rate varies by economic conditions and therefore cannot be compared to the average graph. In should be in a way that if the unemployment increase or the economic growth reduces, the interest rates should be lowered to encourage people to borrow and vice versa.

Economic Growth

A country’s economic growth is gauged in terms of Gross Domestic Product (GDP), such that as the GDP grows so does the economy on the nation. From the graph above it can be witnessed that the United States GDP has been gradually rising since 2000. The only bit where it has a decline is during the recession period from 2008 to 2009.

If we compare the graph with that of the rate of unemployment, we can see some degree of similarity. It is evident that when the economy is getting worse in 2008 to 2009, the rate of unemployment is increasing, validating that they are almost inversely