Question

identify the United States current business cycle phase and how long is the current business cycle projected to last for? Also, who are the clear economic winners and losers in the phase?

Be detailed!

Answer 1

The U.S. economy has been in the expansion phase of the business cycle since the last trough in June 2009. That's over 10 years. Growth periods typically last around five years. As a result, many people worry that a recession is just around the corner, but inflation rates have not been alarming, which is the warning sign that growth is near its height. Instead of inflation, asset bubbles do exist. It was in the U.S. currency in 2015, adding to a strong dollar was the low demand for the euro. There was an asset bubble in house prices just before the 2008 recession. Sometimes, an excessive peak exuberance happens in asset prices without producing overall Inflation

Expansions are prolonging, and by March our latest extension will be the 3rd longest in US history. Our new expansion is not only a long expansion but also much slower than average. We have seen an average GDP growth of just 2.1% since 2009, while previous expansions have seen growth of close to 3%. Slow growth has balanced this economy and kept inflation at bay, but it has also left investors feeling less than happy about their returns. Not only has a long, slow expansion been rough on investors, it's also made it hard to determine exactly where the US is in the new expansion. The key question is whether we are in the mid- to late phase of expansion

Full employment is viewed as an sign that an economy is entering a late expansion period. When an economy is at full employment, companies may fail to expand because they are unable to find skilled labor. Current unemployment rates have been below 5 per cent for the past 6 months, according to the Bureau of Labor Statistics. This is slightly below the 50-year average of 6.2 percent and also just over 5 percent below the widely recognized full-time job rate. Full jobs, however, does not necessarily mean that an expansion ends by itself. Healthy economies will last on or near to full employment for years as long as inflation is under control.

Industrial output increases over an extension. This is attributed to increased consumer purchasing power and an rise in their demand for products correlated with that. There was moderate present-day industrial development. Manufacturing, mining, and energy are three main areas of industrial development. Such sectors (among others) are tracked by the Federal Reserve to measure production growth. Industrial production has increased by 4.6 per cent since 2012 and increased by 0.5 per cent in 2016. The growth is high and sustainable, although sluggish.