Forecasting the Future

forecasting the future

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Broad general assumptions in USA economy

These are the factors that affect the whole sectors of the economy Their effects are felt through all the facets of the economy and are usually key economic indicators that drive the economy of the country

Some of these factors are employment rates , personal finances inflation , gross domestic product , deficit-trade and Budget , exports and imports , home sales , consumer sales (retail index , productivity index and interest rates

Forecasts of general economy

indicators inflation

Inflation- The next one years ' forecast

Inflation is the general increase in overall price of consumer goods and services . Inflation erodes the purchasing power of the currency which is essence means that the consumer 's purchasing power is diminished Inflation is where there is so much money in the economy chasing very few goods leading to the upward rise of the prices of these goods and services . Inflation usually has the net effect of reducing the living standards of people even though they are earning extra money

The inflation rate is measured using the consumer price index (CPI

The inflation rate in the U .S is expected to hover at around 2 which is a slight drop from last year 's rate of around 2 .7 ( Economist

According to the Federal Reserve Bank , the expected range is 1-2 . Next year inflation rate is above this range

Some of the causes of this include the rising energy prices in the international market . The oil prices have been surging and edging toward the 100 a barrel . This has a negative effect on the economy

Inflation - 5 years ' forecast

The expected inflation rate in the next 5 years is to average 2 .4 percentage points . This rate of inflation is above the level where the Federal Reserve Bank expects it to be which is between 1-2

Inflation-20 year forecast

Although it is hard to predict and forecast for a very long time in to the future the expected inflation rate for the 20 years period from 2000-2027 /is expected to remain steady and drop marginally in some years barring any major economic occurrences

We have to appreciate that forecasts into a long future period may not yield very accurate returns hence the difficulties in forecasting the inflation rate . Factors like oil price could substantially change inflation rates

GDP (gross domestic product

Year 2008 GDP forecast

Gross domestic product is the sum of the the economy in a given time period . It measures the increase in the national wealth of a country

In the U .S , GDP measurement is released on a quarterly basis . The GDP of a country measures the value of all additions to the economy by both citizens and non citizens

GDP in the US is reported using two forms . The first one is GDP adjusted for inflation and the other reporting method is the one without inflation adjustments

The real GDP for 2006 was 2 .6 (from HYPERLINK "http /www .bea .gov www...