Economic Forecasts The retail consumer market must take into consideration many indicator forecasts that help estimate what the economic market will be like for the future. The following information contains two or more forecasts based on our teams six pre-selected indicators. This team will provide reconciliation between both forecasts and will apply economic theory in deciding which one may be the most relevant to the gift and novelty industry. GDP Information retrieved from the Economist Intelligence Unit Data Services (2005), the GDP (in billions) is expected to be 13034. 5 in 2006 and 13766. 2 in 2007.
However, according to the data retrieved from the Blue Chip economic indicator, the forecast ed GDP (in billions) is 12907 for 2006 and 13617 in 2007 (The White House, 2005).
Foreign investment is a factor that is increasing the overall GDP. Over a period of time this will eventually bring higher gross domestic investments, resulting in more productive physical capital in the U. S economy. The additional capital will make labor more productive, which provides an increase in GDP and wages.
Based on this information, it is thought that the EIU forecast is more correct than the Blue Chip indicator. Unemployment Unemployment is another area that can affect this industry. Data retrieved from the Economist Intelligence Unit (EIU) projects that the unemployment rate in 2006 will be at 5% (Economist Intelligence Unit, 2005).
The Essay on Construction Industry Growth Economic Unemployment
Put simply, a business's goal is to maximize profits. This requires any company to remain competitive in its market and this in turn requires management to make decisions. These decisions are influenced by the 'business environment'. Macroeconomic factors including economic growth, unemployment, and inflation are part of the business environment and highly influence the decisions of the business. ...
Data derived from the Blue Chip consensus indicator, however, projects the unemployment rate for 2006 will be at 5. 2% (The White House, 2005).
By taking into consideration many outside indicators, such as the GDP-that show a slow but constant growth, will allow private investment to remain constant. This will encourage private industry to maintain their employment at a constant level. In understanding what this nation faces in the near future, this team recognizes that many of the Baby Boomers will retire, which reinforces the premise that unemployment will eventually stay at or fall below 5 %. Housing Starts Housing starts seems to be one of the most visible in regards to economic growth. Based on the analytical tables provided by National Association of Home Builders (NAHB) and Steele Analytics, 2005 and 2006, housing starts will decline slightly. NAHB shows that 2005 housing starts (in thousands) at 1, 969 decreasing in 2006 to 1, 855 (NAHB, 2005).
Steele Analytics also shows housing starts (in thousands) for 2005 start at 1, 883 with a slight decrease in 2006 to 1, 825 (Steele Analytics, 2005).
It would appear that the Steele Analytics table, by comparing the data from various sources, would be the most accurate, because the NAHB Web site is controlled by a single association that has a large interest in showing positive forecasts for housing starts. Interest Rates The interest rate is also an indicator that is very visible in regards to the health of the overall economy. The projected forecast, estimated by 56 economists for the Wall Street Journal, is that the Federal Funds rate will increase three more times, each by 0. 25% over the next 12 months (Gerona-Morales & Hilsenrath, 2005).
It is difficult to say when, but it is evident that the interest rates are increasing and the trend will continue.
These rate changes are a double-edged sword for some as we see an almost immediate rise in short term lending rates, but the M 2 sector will begin to receive a higher rate as well. M 2 has expanded recently, but the pace has been rather slow due to slower rising rates on the current market rates. Personal Income The real personal disposable income percentage, according to The Economist Intelligence Unit (EIU) forecasts are those 2006 changes will be at 3. 5% (Economist Intelligence Unit, 2005).
The Essay on Number Of Homeless People Housing Increase Population
Homelessness, condition of people who lack regular legal access to housing. Homelessness has been recognized as a significant social problem in the United States since the early 1980 s, when an increase in the number of homeless people was caused by a weak economy and cuts in federal aid for housing and income assistance. Other periods of increased homelessness also have occurred many times in ...
Similarly, a forecast from the Labor Statistics Bureau of Economic Analysis suggests that the annual percent change for 2006 will be closer to 3.
4% (Caranci, 2005).
Our Team suggests the 3. 4% forecast would be the most appropriate. To come to this conclusion, this team has taken into consideration current events.
Because of the added cost of fighting terrorism and the current fiscal policy, which has instilled tax cuts to millions, to pay for these expenses there is certainty that tax laws will be adjusted in the near future. By having tax laws adjusted, which may result in tax increases, will affect every Americans’ real disposable income level. Retail SalesInternetretailer. com conducted a survey in May 2005 on the future of online retail sales.
The survey revealed 35. 2% of 268 merchants and others expect revenue to increase at least 35% over the next year. 21. 7% of chain retailers are hopeful in that they see online sales increase 100-200% five years from now (Brohan, 2005).
In 2001, Jupiter Media Metrix forecasts that by 2006, 63% of people who access the internet will make purchases (About, 2005).
Our team feels that 63% is the most accurate based on the internet traffic and number of households with internet access. Convenience plays a large role in today’s society and the internet is a 24 hour operation allowing consumers to shop at anytime. Conclusion Despite all six indicators pertaining to different areas, they operate in collaboration with one another. For example, when there is decline in the GDP levels, there is likelihood that personal income levels are lower, therefore assuring less spending on higher end retail goods, thus affecting retail sales. Another example is if this country predicts a large increase to unemployment.
The Research paper on Internet marketing 5
1. Introduction During the past decade, the popularity of the Internet has been growing explosively. This trend is manifested in several ways. First, according to Cyberatlas.com (2002), the Internet in the United States is growing at a rate of 2 million new Internet users each month; 143 million Americans (54 percent of the population) used the Internet in September 2001, a 26 percent increase ...
Not only would this affect the personal income level, but would then circle back and affect the overall GDP. Although, if there is indication that interest rates are projected to be lower, there would be a feeling that the economy is growing, therefore resulting in better retail sales and housing starts. To properly monitor what the future will behold, one cannot rely on one specific indicator. To understand what the future will bring for this industry, one must realize how one indicator affects another and how the final estimate will result in a more accurate forecast for the entire gift and novelty industry. References About. (2001).
U. S. online retail sales to reach $130 billion by 2006. About.
Retrieved from web j up 052201. htm On Saturday July 2, 2005. Brohan, Mark. (2005).
Survey: retailers look to the future. Internet Retailer.
Retrieved On June 30, 2005, from web Caranci, B. (2005).
U. s. economic outlook. TD Bank Financial Group.
Retrieved on July 1, 2005, from web Intelligence Unit. (2005).
United states – country data. EIU Data Services. Retrieved on June 30, 2005, from University of Phoenix Library website: web R. & Hilsenrath, J.
E. (2005).
Issues include inflation, oil, china and when fed will stop rising rates. The Wall Street Journal Online. Retrieved on July 1, 2005, from web Association of Home Builders.
(2005).
Housing starts and interest rate forecast. Retrieved on June 28, 2005 from Web site: web V. R.
(2005).
Minutes of the federal open market committee may 3, 2005. Board of Governors of the Federal Reserve System. Retrieved on June 20, 2005 from web Analytics. (2005).
US construction and real estate market pulse: u.
s. housing starts forecast. Retrieved on June 28, 2005, from Web site: web White House. (2005).
Table s-9. comparison of economic assumptions.
The White House, Office of Management and Budget. Retrieved on June 30, 2005, from web.
