If you’re a taxpayer, chances are you’ve heard about the economic income tax return stimulus checks that the IRS will send to qualified individuals and couples, beginning in May of this year. The purpose of these checks, which will range from three hundred dollars to possibly more than triple that amount, is to boost the state of the current lagging economy. Taxpayers who are eligible to receive a check will gladly accept the added money and either spend it or save it, but the question is: Is it enough to help? That’s what many taxpayers are currently debating about, because many of them are worried about where the money is coming from, as well as if the money will even cause the economy’s state to improve.

Continue reading "Economic Stimulus Income Tax Rebate Checks: Will They Do Much to Help the Economy?" »

Posted by Mike - Editor at 7:39 AM | Permalink

Typically, when the Federal Open Market Committee (FOMC) raises the federal funds rate, long-term interest rates react by increasing also. However, between June 2004 and July 2006, the FOMC raised rates 17 times in .25 percent increments, from 1% to 5.25%, and long-term rates barely moved.

Continue reading "Understanding Long-Term Interest Rates" »

Posted by Emma - Editor at 8:30 AM | Permalink

Since the mid-1980s, inflation has been much lower and more stable than it was in the past. The high inflation rates of the 1970s detracted from the country’s standard of living, hindered capital formation and economic growth, and took the country many years to overcome the adverse effects. It is now generally believed that maintaining a low and stable inflation rate provides lasting benefits to the economy, which is why it is one of the Federal Reserve’s primary monetary policy goals. As detailed in the 1977 amendment to the Federal Reserve Act of 1913, the Federal Reserve’s goals when setting monetary policy are “to promote maximum sustainable output and employment and to promote stable prices.”

Continue reading "How Long Will Low Inflation Last?" »

Posted by Nickie - Editor at 10:49 AM | Permalink

According to a Gallup poll taken 8/13-8/16/07, Americans are suffering from a lack of confidence in the economy. “The new poll finds current economic ratings down to 33% excellent or good and the percentage saying the economy is improving sinking to 20%.” A majority of Americans are feeling the economic slump.

Continue reading "Consumer Confidence: Do You Have Any?" »

Posted by Mike - Editor at 7:35 AM | Permalink

For the past two decades, the economy has experienced moderate inflation and fewer, less severe recessions. Technological advancements have helped raise productivity. Yet, these advances have mostly helped upper income workers. Why?

Continue reading "Technological Advancements and Economic Inequality" »

Posted by Nickie - Editor at 7:18 AM | Permalink

For years, we have heard that aging baby boomers will place a tremendous strain on our economy after retiring. However, the problem is not limited to the United States, since the populations of Japan and Western Europe are also aging rapidly. With much of the world’s wealth held by people in the United States, Western Europe, and Japan, there will be a tremendous strain on savings worldwide due to the fact that retired people typically save less than younger people.

Continue reading "Aging Population and the Affect on the Economy" »

Posted by Emma - Editor at 10:29 AM | Permalink

Employment statistics are some of the most timely statistics generated by the government. Employment figures are typically released within three weeks of month-end. This timeliness, coupled with the fact that employment figures signal broad-based changes in the economy, make it a closely watched statistic.

Continue reading "How Employment is Measured" »

Posted by Nickie - Editor at 12:30 PM | Permalink

Almost daily, it seems like there is another news item indicating that service jobs in the United States are being outsourced to other parts of the world. When manufacturing jobs were lost to overseas markets, it was painful for those who lost their jobs, but seen as positive overall for the economy. The end result was lower prices for consumers, a more efficient economy, and a higher overall standard of living.

Continue reading "Where Are All the Jobs Going?" »

Posted by Emma - Editor at 1:00 PM | Permalink

The most commonly cited measure of inflation is the Consumer Price Index (CPI). However, the government releases not one, but three, versions of the CPI: CPI-U, CPI-W, and C-CPI-U.

Continue reading "How Do We Measure Inflation?" »

Posted by Mike - Editor at 8:42 PM | Permalink

For years, we’ve heard that our personal savings rate is dismally low. However, that knowledge has not led to an increase in savings. Instead, personal savings as a percentage of disposable income has continued to hover at historically low levels, 0.9% in 2004 (Source: The Regional Economist, July 2005). How concerned should we be by this trend?

Continue reading "What Happened to Personal Saving?" »

Posted by Mike - Editor at 12:49 PM | Permalink

A federal deficit occurs when the government’s expenditures for the year exceed its income. The government then pays for those excess expenditures by borrowing money, adding to the national debt. After a brief period of budget surpluses, the federal government is again running up substantial budget deficits. Are these deficits a cause for concern? It’s tough to decide, since opinions range from they don’t matter at all to they will ultimately result in federal bankruptcy. It might help to put the federal deficits in perspective.

Continue reading "Are Federal Deficits a Cause for Concern?" »

Posted by Mike - Editor at 12:46 PM | Permalink

Watching key economic indicators over time should help you understand the signals the economy is sending. While you may not make financial decisions with certainty, understanding the economy should help you make decisions, such as which investments to purchase and sell, when to lock in mortgage rates, and when to purchase major durable goods, with more confidence. Some of the more important statistics to track include:

Continue reading "Keeping an Eye on the Economy" »

Posted by Mike - Editor at 2:08 PM | Permalink

An international investment’s total return is based on two factors — the investment’s return in local currency plus currency fluctuations. For example, suppose you purchase a British stock whose price increases 10% in one year in terms of British pounds. If, during that same year, the British pound increases in value by 5% compared to the U.S. dollar, your total return would be 15% — 10% from the investment’s return plus 5% from currency fluctuations. However, if the British pound decreased in value by 5%, your total return would be 5%.

Continue reading "The Basics of Currency Fluctuations and Currency Exchange" »

Posted by Mike - Editor at 11:22 AM | Permalink

A yield curve is a graph plotting interest rates for the same type of bond for a series of maturities, typically
ranging from three months to over 25 years. Although yield curves can be plotted for any type of bond, they are most commonly seen for Treasury securities.

Continue reading "Interest Rates and the Yield Curve" »

Posted by Mike - Editor at 12:21 PM | Permalink