Macroeconomic Issues of USA

Macroeconomic is the study of economic system of a country in relation to the external world also. It consists of different variables like trade, employment, interest rate policies, country's monetary policies and financial system etc (Carson, Thomas & Hecht, p. 15).

Following is the discussion about some the major issues of macroeconomic situation of United States.

Unemployment

Unemployment means out of work or in a state of having no job. The high rate of unemployment shows the poor economic condition of the country (Carson, Thomas & Hecht, p. 17). USA is a well developed country in the world and regards as a number 1 country through job opportunities and business perspective. In present time, country is suffering from the issue of unemployment which is a major concern for the US government. The unemployment rate has reached the 9.2% in June 2011, which is highest in this year even after the recession. Employers hired only eighteen thousand employees in June, which is the least rate in last 9 months.

Some of the major reasons of unemployment are as follows:

The increase in population is a prime reason for unemployment because, the population is increasing but, the employment opportunities are not coping with that rate (Katz, p. 1).

Most of the national companies are facing tough competition from the firms of other countries, which results in financial insatiability. As businesses in US are closing down, and employees do not have any other option instead of going home (Katz, p. 1).

Due to the technological boom, firms are automating their systems like production capabilities, usage of customer relationship and supply chain management systems, allowing companies to reduce the workforce (Katz, p. 2).

There is a large problem of seasonal unemployment, because, in US, there are lots of businesses which only work in a single season. So, when season ends the unemployment ratio rises (Katz, p. 3).

Most of the companies are getting their work is done by the other countries like Asian or African countries because of less salary, and this is again increasing unemployment.

Above mention are some of the issues which government is facing and taking some measures to overcome on these issues.

Interest Rates

At present, the interest rates are very low in US. Government is capable to get a huge amount of money for next to nothing. Consumers are still getting home loans, personal loans, car loans and study loans at a very low rate. Financial analysts are expecting that the environment of this low interest rate will change, and it will fully demolish the country's economy. Without this low interest rate system, the financial structure of the country will not survive. When we have very low interest rate, then we always ready to take loans and do not find difficulty in paying off loan. But, when there will be high interest rates, then debt will become painful (Barro, p. 341).

The primary reason for the finances of government is not falling completely because the government is still getting more loans at very low interest rates. If interest ...