The Economy Posts 2.2 Percent Growth (11/29)
"Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.2 percent in the third quarter of 2006, according to preliminary estimates released by the Bureau of Economic Analysis.” Discuss how an acceleration imports may have decelerated the economic growth during the third quarter (GDP Highlights). Identify key components of GDP and assess their relative share or part of GDP (Components). Discuss how a declining consumer confidence level may affect the overall economic performance or growth in the future (Confidence Index).
Pfizer To Restructure Its Organization (11/28)
“As part of its strategy to most effectively and efficiently meet customer needs as well as match the organization's business needs, Pfizer said today that it will realign its U.S. sales organization. The company will reduce the U.S. sales organization by approximately 20 percent…”Discuss why it is important for firms to respond to changing market conditions and restructure their scale of operations (e.g. reduce its long run average cost curve). Examine how Pfizer stack up against its competitors in the industry in terms of its relative efficiency and profitability (Industry Data). Determine if Pfizer’s announced cost cutting measures make good economic sense (Stock Price Trend).
137 Million Go Shopping After Thanksgiving (11/21)
“Retailers around the country will open their doors to approximately 137 million shoppers this weekend according to the latest survey conducted by BIGresearch for the National Retail Federation – with many consumers planning on heading straight to the electronics and toy sections.” Examine why consumer spending or personal consumption expenditures are the main driver of the overall U.S. economic performance (GDP Estimate – See Table 3). Discuss how a strong holiday sales performance can influence the overall U.S. economic performance (Holiday Sales).
Sony’s Loss Is At Least $241 On Every PS3 (11/16)
“At these costs, Sony is taking a considerable loss on each PlayStation 3 sold. Materials and manufacturing costs for the 20Gbyte model exceed the suggested retail price of $499 by a total of $306.85, iSuppli’s Teardown Analysis service estimates. For the 60Gbyte version, costs exceed the $599 price by $241.35.” Discuss why Sony is willing to sell their PS3s below their production costs (Games). Examine why gaining and securing a large market share is important to firms which sell complementary products and services (Search Shares).
Remembering Dr. Milton Friedman (11/16)
“Nobel laureate Dr. Milton Friedman passed away early this morning, in his San Francisco home, of heart failure. He was 94. ” Review Dr.Friedman’s two fundamental theoretical contributions to the economic policy debate: the Quantity Theory of Money and the expectations-augmented Phillips Curve (Theories). Discuss how increasing money supplies may lead to higher levels of inflation while having no affects on the natural rate of unemployment in the long run. Examine why Dr. Friedman noted, “inflation is always and everywhere a monetary phenomenon” (Money/Inflation).
President Bush Meets With CEOs of US Automobile Manufacturers (11/14)
“THE PRESIDENT: The Vice President and members of my Cabinet, Secretary of Treasury, Secretary of Transportation, members of my staff and I have just had a constructive and meaningful dialogue with CEOs of the U.S. automobile manufacturers. First, these leaders have -- are making difficult decisions, tough choices to make sure that their companies are competitive in a global economy.” Discuss why firms exist. Explain why firms must minimize their production costs when operating in a hyper competitive global market (Auto Industry). Review the current Big Mac index and utilize its Purchase Power Parity measures to assess if the Japanese Yen is under or over valued against the dollar (Index). Discuss how a relative value of currency can affect its terms of trade or competitiveness.
Fed’s Yellen Laments Income Inequality (11/06)
“The wealthiest Americans have benefited most from a rising economic tide in the United States, and the resulting widening income inequality should be addressed, San Francisco Federal Reserve President Janet Yellen said Monday.” Examine what is happening to the real median household income in the U.S. Is the nation’s official poverty rate increasing (Income/Poverty)? Utilizing Gini Index, discuss if income inequality is indeed increasing in the U.S. in comparison to other economies (Index). What factors may be behind this development (Education)?
Unemployment Rate Declines Further (11/03)
“Employment increased in October, and the unemployment rate declined to 4.4 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment grew by 92,000 in October following gains of 148,000 in September and 230,000 in August (as revised). ” Review historical unemployment rates (Historical Data). Assess the current employment condition Discuss why the monthly household survey is considered to be less reliable than the monthly payroll survey when assessing the employment condition (Analysis). Examine if there are any signs that the slowing economy may be affecting the job creation (Payroll Data).
No Productivity Growth (11/02)
“ The Bureau of Labor Statistics of the U.S. Department of Labor today reported preliminary productivity data--as measured by output per hour of all persons--for the third quarter of 2006. The preliminary seasonally-adjusted annual rates of productivity growth in the third quarter were: 0.1 percent in the business sector and 0.0 percent in the nonfarm business sector.” Discuss why the productivity measurement is important (BLS FAQ). Examine if there is a relationship between labor productivity and inflation (Data). Discuss why inflationary pressures tend to build up in the economy when labor productivity growth rates slow.
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