Article Abstract:
The stock exchange has come to be seen as having an impact on the economy as a whole, and US stock price rises as having boosted demand, and so prolonging economic growth. Expansions have tended to end as a result of supply side constraints, with low unemployment showing that the constraints are operating, resulting in inflation. The US labor force is better educated, so the level of unemployment at which constraints are felt may have dropped. Increased investment may reduce unemployment as it may involve more labor-intensive activities. Supply and demand could be affected by a drop in stock prices, leading to higher inflation and unemployment.
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Article Abstract:
US unemployment has fallen to 4.1%, while nearly 22 million new jobs have appeared in the 1990s and wage and price pressures appear to be absent. Labor supply has expanded by more than was believed possible, with more women entering the labor market and a drop in early retirement rates. Welfare reform and illegal immigration may have increased labor supply. Low inflation may be one reason for low wage pressure. The relationship between unemployment and inflation has changed, and this could be for a number of reasons, such as a higher incarceration rate and an ageing labor force.
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Article Abstract:
US job shedding has affected professionals, but many companies are concerned about morale, and aim to cut costs in ways other than shedding jobs. Forecasts for the impact of these trends on the economy are also assessed.
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