Intermediate Macro Student`s

IntermediateMacro

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Throughoutthe world, one major challenge every government grapples with is thestability of its economy. Whereas, governments are tasked withensuring respective countries` economies improve, it is factual tostate that there are external factors that influence it. Forinstance, the business-stability or lack of it thereof will seeemployment status either go up or decrease. Additionally, consumerspending is an imperative to every economy as it enables thecirculation of money to various businesses thus improving it. In thisessay, the focus dwells on the consumer-spending and auto sales inUnited States as it relates to the economy.

Consumer-spending

Inan economy, consumers play a pivotal role in its growth ordeterioration, for that matter. Normally, consumers buy goods such ascars, food and other commodities economists refer to this asconsumer spending. Whenever the government seeks to balance theeconomy, one thing it encourages is encourage consumer-spending.Usually, this is done by reducing tax and in some cases releasing alump sum which consequently sees more spending on various goods. Whenthe spending is on the rise, business people are sometimes able topay employees better salaries thus improving their lives.

Autosales

Inthe US, the sale of automobiles is a major determinant of the economyand many manufacturers normally send the sales report to theDepartment of Commerce. Then, the department releases the monthlyreport in about five days – after submission- and this enables theeconomists to understand the consumer spending and demand onvehicles. In light of this, choosing consumer-spending and auto-salesis a perfect match for this paper as it reflects a lot about the USconsumers. Firstly, if the consumers spend higher on automobiles, itcould be argued that many are financially stable.

Consumer-spendingand Auto-sale statistics

Asof July 2014, Bureau of Economic Analysis (BEA, 2014) reported thatconsumer-spending had hit a new mark with an increase of $40 billionto reach $10960.90 compared to last year’s $ 10912.60. In addition,it was noted that this was the highest spending in US history. On theother hand, in October auto-sales witnessed a 2.8% increase oflight-vehicle, compared to September’s sales, which translates toaround 1.3 million of vehicles sold. This was a 6% increase comparedto the same period a year ago which essentially means Americans havebought more vehicles this year than the previous one. However, carssales had only grown by 1% but different figures on heavy-duty trucksand light trucks which grew by 5.1% and 9.7% respectively (NADA,2014)

Relations

Fromthe data provided, one can clearly notice several trends hence makesome conclusions about the American people. Firstly, it isappropriate to state that many Americans are spending less on carsbut a significant amount on commercial vehicles. Secondly, the USeconomy could grow if the light and heavy trucks bought by Americansare used in profitable ventures. Finally, analyzing the increase inthe expenditure explains – in a perfect way- some of the ways theAmericans are spending money. In other words, there was an increaseon consumer-spending this year, and so was the increase in theauto-sales. Therefore, this could as well be interpreted to mean thatthe public is spending money on vehicles with a sole purpose ofgenerating more money.

Inconclusion, the consumer spending and auto-sales in US areintertwined as clearly indicated by the data provided. With theAmericans hitting a new mark in terms of spending, the good news isthat the expenditure is not perishables or mere consumption. Instead,many are spending on automobiles intending to make more money in theprocess. With the increase seeming to rise each year, it is importantfor the business community to understand the consumer trend in orderto seize the opportunity. In short, if the American public is goingfor the vehicles capable of doing business, the people in theautomobile ought to meet the need.

References

`ConsumerSpending`. (2014) Bureauof Economic Analysis. RetrievedNovember 2014 from

http://www.bea.gov/national/consumer_spending.htm.

Nada.org,.(2014). `NADA DATA`. Retrieved November 10 2014 from

http://www.nada.org/Publications/NADADATA/.