19 Feb

In spite of the fears which have been going on about a recession impending in the summer, the economic expansion of United States which is longest recorded one is now going on to its twelfth year.

The market of labor has been booming. The creation of jobs has been solid with a robust number of 225,000 which have been added in the month of January and the unemployment levels are lowest in nearly last five decades and there is a growth in the economy at a slower and steadier pace with the nation showing an expansion by a level of 2.3% in the year 2019.

The growth is not going last forever and in the end there is something which is going to end the growth.

Recession or the periods which growth in GDP, employment and income employment as well as the sales in retail suffer are a part of the economic cycle, however these are very difficult to make a prediction on. The longer there is an expansion, the more it is likely to affect the victims in times of a slowdown.

An economy which is overheating, which means that the demand is outpacing the supply has two major characteristics, rise in inflation and the unemployment below their natural rate which is causing the growth to take place at a rate which is unsustainable.

Close to every recession which has taken place since the World War 2 has been featuring a run-up in the inflation before there was a beginning of recession.

The largest had been an increase of eight percentage point in the inflation before the recession of 1980. Fed’s preferred level of inflation has been 2% and it is presently at a level of 1.6%.

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