Business Cycle
Business cycle is also known as economic cycle. It refers to economy-wide change in the production or economic activity which takes place for a period of months or years. The fluctuations happen around a trend which is long-term. They also include changes over time between periods of relatively speedy growth of the economy. It further includes periods of relative contraction or recession. Real gross domestic product refers to the output of goods and services which are produced by labor and property. These labor and property are located in the United States. They decreased at a rate of 5.7 percent per year in the first quarter of 2009. The Bureau of Economic Analysis released a preliminary estimate. According to these estimates, the decline took place as from the fourth quarter to the first quarter. By the fourth quarter, there was a percentage decrease of 6.3 percent.
In February, the Producer prices in the U.S. increased up to 0.1%. This happened at the time there was a weighing of higher energy prices into the increase for the second following month. This was as a result of Labor Department report which was released on Tuesday. The first increase since August in the year 2008 was the Producer price intake. In February the energy price had increased up to 1.3% but this took place very slowly. In January, there was switching off of the Energy costs. They rose up to 3.7 percent in comparison with the 9.1 decline which took place in December.
In April, there was a very little change in the Regional and state unemployment rates. Over the month, there was a record of the decline in the unemployment rates in twenty-one states. It was found that18 states and the District of Columbia had registered rate increases. However, there was no any change in 11 of these states. In all the 50 states and also in the District of Columbia, there was increase in the jobless states over the year. In March there was a rise in the national unemployment rate which was from 8.5 percent to 8.9 in April. This was a percentage of 3.9 points higher than a year earlier.
The above indicators show that the economy is in a recession which is a general slowdown in economic activity over a sustained period of time, or a business cycle contraction. There is a private consumption fall for the first time in nearly 20 years which is seen by the 2008/2009 recession. The depth and severity of the current recession is shown by this. Recovery takes a long tome when the consumer confidence is very low. Consumers do not only watch their wealth being eroded, but they now fear for their jobs because there is rise in unemployment. In March 2009 the rate of unemployment in the US grew to 8.5 percent. In the same year there have been 5.1 million losses of jobs until March 2009 because the recession started.
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