Are We In For A Stronger Economy?

Are We In For A Stronger Economy?

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According to the Federal Government, they are anticipating optimism for the economy and strength. There is anticipation that as the year progresses that things will speed up. So what is entailing a stronger economy? Apparently the job market. There has markedly been a decrease in the unemployment rate.

It has stayed under 300,000, which is apparently good. What does this exactly mean for the economy. Well, it means that people will be spending more money. When people have sustained income and jobs they tend to turn into consumers and hence spend more money. Clearly, this will be beneficial to the economy. This will drive revenue for companies and businesses and will help the economy grow versus survive.

What else is driving a stronger economy? The housing market. Although prices are still relatively high, people are still purchasing homes so it is maintaining stability. Classically, houses are sold prior to them being built, which indicates that every sale leans towards employing construction workers and spending income on materials over a period of time. In addition, when consumers finally move into their homes they typically spend money on sprucing it up.

Going back to the topic of jobs another matter that will increase for a stronger economy is, when a business spends money on better machines it pushes workers to be more constructive. Traditionally, higher efficiency will lead to increased wages. And isn’t that what we all want?

According to Financial Times, the US economy ended the year on a high note, giving some support. The recovery though remains steady, rather than spectacular. Annualized Q2 2016 GDP growth at 1.1%

 

In terms of Canadian statistics, according to Trading Economics our GDP Growth Rate is -0.4%, unemployment rate at 6.9%, and inflation rate at 1.3% and interest rate at 0.5%.

 

So at the end of the day, no economy is perfect, but growth is always better than survival and it looks like it will continue to grow, because people love to consume, work, and spend money.

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I am a lecturer at the University of Economics in Bratislava, department of Banking and International Finance. I have a Ph.D. academic degree, my dissertation was focused on major markets. Commodities and stock markets are also the main focus of my research and publication activities.
I have approximately 10 years of investing experiences. My investments mostly focus on small- to mid-cap companies of energy sector, financial and technology.

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