US Bureau Of Labor Statistic Case Study

996 Words 4 Pages

Every month the US Bureau of Labor Statistic (BLS) announces the value of unemployment rate for the previous month. The rate is a key measurement of how the economy is doing, the announcement is widely watched and if the unemployment rate is different from what the financial market expects, there will be large movement in those markets. Therefore, it is important to know how the Bureau of Labor Statistic works with the unemployment rate.
Measuring Unemployment

There are data of unemployment rates released each month by the BLS, it is based on a survey of 60,000 households. Each household is given a series of questions concerning the work activity in the house hold of member 16 and older in the household. If the person in the house has …show more content…
The BLS survey provides some evidence on the size of the discouraged workers effect. Respondents indicate that they have stopped searching for a job are asked why and if the respondents states an inability to find a job as a sole reason they are probably considered discouraged worker. The number of discouraged workers hover around one percent of the labor force in regular times. In March of last year they number of discouraged workers where only about 0.5 percent of the labor …show more content…
economy, prices of individual goods continually change as supply and demand shift. Indeed a major concern for macroeconomics understanding the way in which relative price change, for example, having to computers become less expensive over time and dental services more expensive. In macroeconomic they are not concerned with relative price changes, but with change in the overall price level of goods and services. Inflation is defined as an increased in the overall price level, whereas deflation is a decrease in the overall price level. When all the prices of multitude goods and services in our economy don’t rise or fall together, the rate makes measurements of inflation

Economic Effects Of Deflation

Thus people choose either invest in something that will returns more to balance inflation, or they purchase some fixed assets to store their wealth. However, when people know that money will worth more in the future, the risk-averse people will consider to save the money rather than invest or consume something. Therefore, the national output will fall due to the investment and consumption falls (Y = C + I + G + NX). Another way to explain the nation output falls can be illustrated by AD-AS mode. The deflation leads a negative shock in aggregate demand, therefore the AD curve shifts to the left, both of the price level and real national output falls.…

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Consequences Of Raising Minimum Wage

The Federal Reserve set the limit to the amount of money that 's allowed to be borrowed from the government to banks. So increasing the interest rates would cause banks to increase their rates as well if they want to make money as well. As a result, consumers spend less, causing prices to drop and slowing down the inflation. Secondly, the reserve requirements must increase. When the reserve requirement increases, it allows banks to hold more money to cover up the costs of withdrawals, thus limiting inflation because consumers will borrow less and decrease spending.…

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Inflation In The Macro Economy

It is also important to recognize that the Consumer Price Index (CPI) is a weighted average of the change in prices of goods and services across the economy. It is as unrealistic to expect the prices of all goods and services exactly to conform to the average. Correspondingly price increases for health care have consistently outpaced the “average” rate of inflation across the economy for a variety of reasons, among which is the inherent labor intensiveness of the health care sector. It is unrealistic to tie limits on health care spending, which must reflect inflation in the health care sector, to a measure of inflation that is less than the real rate of…

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The Importance Of Economic Expectations

Federal Chairman Ben Bernanke presented his semi-annual monetary policy testimony to the House of Financial Services Committee this month. In his opening statements, he said that the Federal Reserve will hold interest rates at current levels until 2014. The interest rate effect is a major effect on demand and supply. As prices rise, households and businesses require more money to handle their transactions. However, the supply of money is fixed.…

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Normal Business Operations Case Study

The lack of employees has produced an initial increase in monetary savings but the prolonged effects of not having adequate employees will yield a large decrease in the revenues over an extended period Fd gqert q4tq gqert notice a lack of employees manning the store. If you have a question about a product good luck trying to hunt someone down to assist you with your inqucdtrt;qwerkqwe’r233343240234l’iry. Often times you will feel as if you are the only one in the store. This is due to the fact that TheStore has trimmed the company employees down below an acceptable level for conducting normal business operations. The lack of employees has produced an initial increase in monetary savings but the prolonged effects of not having adequate employees will yield a large decrease in the revenues over an extended period Fd gqert q4tq gqert notice a lack of employees manning the store.…

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GDP: One Of The Five Most Important Economic Pereconomics

Interest rates influence many perspective of people’s daily life, it’s correlated to the cost of borrowing, the return on savings, as well as returns of many investments. Interest rates affect consumer spending, thus affect the over all GDP. The higher the rate, the higher people need to pay for their loans and less they could spend on credit. Interest rates also affect inflation as well. If the interest rate goes up, the borrowing will be more difficult, thus there will be less money in the market and the inflation will no go up so fast.…

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Johnson And Johnson's Change In The Monetary Policy Of Johnson & Johnson

Effects of the United States monetary policy and fiscal policy on the financial performance of Johnson and Johnson Looking at the short-term trend of Johnson and Johnson we can see that the current monetary and fiscal policies are affecting the company’s performance as the different changes in the policies creates drawback for short-term investments which Johnson and Johnson do in retailing of their products to pharmacies on retail. While on the long-term trends the policies allow them to create a steady profit. I would say that a contracting monetary policy would do no good for Johnson and Johnson financially but the expansionary monetary policy would help in creating a better financial report for Johnson and…

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Compare And Contrast The Classical Model And The Keynesian Economic Model

This affects a decline in the aggregate curve in the same way: a decline in demand causes the curve to shift leftward, but the equilibrium level remains constant. This constant of price levels, or the aforementioned “sticky prices” is what causes the inflexibility. In the Keynesian model, the flexibility of price levels, most importantly wage levels, is what causes movement along both the demand and price levels on aggregate supply curves. Without this flexibility and shifting, the economy is led to stagnation and contraction. The failure of a needed rightward or leftward shift of the price level is what the Keynesian Model unemployment tends to rise sharply.…

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Difference Between Fiscal And Fiscal Policy

In contrast, higher interest rates yield less money circulation in the economy. In addition, The Federal Reserve Bank of San Francisco defines monetary policy as an instance where the Federal Reserve controls the volume of money and their price-interest rates (Econ, 2002). On the other hand, Fiscal Policy is set by the government to manipulate the amount of money with increases and decreases in taxes. In other words, the population has more of an incentive to work and spend, due to a cut in taxes. For example, when an individual has more disposable income they are more likely to purchase more goods than before, which will pump money into the economy.…

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Comparison Between Fiscal Policy And Keynesianism

Like fiscal policy, monetary policy is used to speed up or slow down the economy. Unlike the national fiscal policy which is determined by the Executive and Legislative Branches, monetary policy is controlled by central banks such as the Federal Reserve. It is presumed that monetary policy causes the economy to grow at unusually high speeds by encouraging businesses and consumers to borrow and spend (Investopedia 1). If spending is restricted and savings are incentivized, the economy will have slower growth than…

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US Bureau Of Labor Statistic Case Study

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