Economic Indicators Paper
The Housing Industry
By
Tracey Matthew
Andre' Patterson
Julie Taylor
ECO/360
University of Phoenix
July 26, 2007
Mohyeddin Kassar, Instructor
Economic Indicators
Introduction
As previously outlined in our team's first project regarding the housing industry, there were six economic indicators which impact the housing industry. These indicators are GDP, the inflation rate, the unemployment rate, discount mortgage interest rates, housing starts and retail sales. Included will be a brief definition of each and its current status.
Real GDP
Real GDP, or gross domestic product, is an inflation-adjusted measure that reflects the value of all goods and services produced in a given year. Unlike nominal GDP, real GDP can account for changes in the price level and often provides a more accurate figure (Investopedia, A Forbes Media company, 2007).
According to a report released in December, 2006 Wells Fargo economists are optimistic about the 2007 economic growth. "The Gross Domestic Product (GDP) growth is expected to rebound as soon as next quarter" (2007 News Releases, 1999-2007). Dr. Jim Paulsen, chief investment strategist of Wells Capital Management predicts a 3.5 percent growth rate for 2007 based on expectations that the housing and automobile markets will flatten out.
The Inflation Rate
Inflation can be defined as the overall general upward price movement of goods and services in an economy (BLS, 2007). It is a continual rise in price levels and, subsequently, purchasing power is falling. The Consumer Price Index (CPI) measures inflation as experienced by consum ...