Production and Demand Increase

http://www.nytimes.com/2010/03/16/business/economy/16econ.html?ref=economy


Key Terms:
Industrial production: A measure of the country's economic health judged by its output from manufacturing, mining, and utility industries. Industrial production is calculated by the Federal reserve.

Federal Reserve:The central bank for the United States

Inventory: Goods and materials available in stock.

Description:

Since the start of the financial crisis, manufacturing has increased and it provides a great deal of hope for the economy being as inventories rise because of demand increase. Economist are predicting that there will be a large output of manufactured products and that will greatly help the economy.We are recovering due to the recovery of manufactured outputs.It is our most stable growth and it has also reconnected trade flows in the process.

Analysis:
The Federal Reserve has calculated a 1% increase in the sole month of February. The increase had the potential of being higher but due to weather instability and safety, many production days were cancelled or stalled. Another factor that could have increased the percentage is the Toyota recall. In order to ensure safety to its consumers, Toyota was forced to recall its most recent model and spend tons of money to accomodate its customers so that they would stay loyal to the company. Toyota, one of the few car manufactures in the U.S. (others include Ford, and General Motors) has been a contributor to the wealth of this nation, it would be very difficult if we were to lose its contribution.

Explanation:
The United States is in its biggest economic crisis since The Great Depression. Many people are jobless and no money is going into the economy because the unemployed can not afford to buy products and because products aren't being purchased demand has gone down, and because demand has gone down jobs aren't needed.

Prediction:
I am confident that the economy will continue to head in the right direction. However, I do think that it will be a long process and we must all have patience. If people lose all of their faith in the American economy , it will definitely suffer more. Money is such a security blanket for humans because it has proved to be an essential for survival and success in the world. As sad as that is, it is the reality and it is what we know.