How Jah Should Expand Between Now And 2017 - 985 Words

JAH should expand between now and 2017. With the current state of the U.S. economy and the housing market’s predictions, JAH can make an abnormal profit. Currently, the unemployment rate, inflation rate, and GDP growth rate are 5.8%, 1.88%, and 3.9%, respectively (Fred). The unemployment rate is higher than the full employment rate and the inflation rate is lower than the targeted 2% inflation. However, the positive GDP growth rate indicates that the economy is recovering. The current recovery is different from any other recoveries. The current recovery is a â€Å"lackluster recovery.† According to Joel Naroff, there are two reasons. The first reason is â€Å"the collapse of the housing and finance sectors† and the second reason is â€Å"domestic hiring did not occur as it had previously† (Naroff). Even though the economy recovered, â€Å"the unemployment rate was always going to fall slower,† because of the globalization of the labor supply (Naroff ). During the early-1980s recovery, payrolls rose by 1.1 million and the manufacturing added 137,000 workers, in September 1983 alone (Naroff). However, this would never happen in current recovery because jobs go to both domestic and global workers (Naroff). Therefore, Fed continued expansionary monetary policy. With the low interest rate, more projects will initiate, thus, investments will increase. Simultaneously, lower interest rate is discouraging the foreign investments for U.S. bonds, encouraging the U.S. investment for foreign bonds,