Research Project 2

Research Project 2

 

• In this project you will develop and demonstrate competence in identifying sources, collecting appropriate data, and analyzing it to evaluate the health of the overall economy.
• By the due date, upload into Canvas this Word file with answers typed in red font along with a copy of the report used with pertinent info highlighted.
• Always use the most recent report and seasonally adjusted data unless otherwise specified.
• Make sure to state the correct denominations including all respective zeros in your answers (e.g., 125,000 thousand should be written 125,000,000).
• Utilize only the data sources reviewed in class and in the Economic Indicator’s Text.
• Any question ambiguity can be addressed by thoroughly explaining your answer.
• It is expected that you work on this project regularly throughout the semester as each indicator is covered.
• Grading is equally weighted based on letters, not numbers.
• As necessary, questions may be added or modified throughout course, but such details will be announced in Canvas and only apply toward the final graded submission.

 

1. Using the most recent Seasonally Adjusted data from the JOLT report, determine the following:
2. How much higher were jobs openings in the most recent month compared to the year prior? Is this a good or bad sign for the economy?

11263-7232=4031This may be a good indicator that more employment are being created, but it could also indicate that individuals are quitting their positions, which generates opportunities.

1. Identify the separation rate in the private and government sectors, how is this calculated?

Private: 4.5%; government: 1.7%; The number of separations is divided by the number of people who are actively employed to arrive at this figure.

1. What was the change in the total separation rate (%) from the prior to the most recent month?

(4.0/4.1)-1*100=-2.44%

4.1 to 4.0 down0.1%

1. Compare the most recent month change in the number of jobs in the Establishment Survey to the difference between hires and separations for the same month. Are the data consistent with each other or do they differ? Should we expect them to be the same?

 

Change in job Establishment Survey: 147510 – 150352 = -2842

Difference inhires/separations:  = 6457 – 6058
=399

 

 

1. What region had the highest Quit rates in the most recent month? Is this a good or bad sign, why?

With a quit rate of 3.3 percent, the South had the highest percentage. Because we don’t know why these people left, we can’t determine if this is a good or negative indicator. It’s possible that it’s because they had a greater chance, which is frequently the case. It’s also possible that they’re leaving the workforce.

 

2. Using the most recent adjusted data from the Business Inventory Report determine the following:
3. What is the dollar value of sales and inventories?

Sales: 1,717,162,000,000

Inventories: 2,161,362,000,000

 

1. What percentage of sales do inventories account for?

129%

1. From the prior month, did inventories increase or decrease as a percentage of sales and by how much?

Increased from 125% in Nov to 129% in Dec, which is a 4 percent increase.

1. Determine the ratio of inventories to sales for retailers and manufacturers and explain any difference?

Retailers: 1.16

Manufacturers: 1.46

Since a manufacturer’s company’s objective is to create products, they prefer to have a lot of inventory on hand, whereas retailers just sell and buy inventory as needed.

1. From the prior month, did manufacturing inventory-sales ratios rise or fall and is this a positive or negative signal for the sector?

No change in inventory to sales ratio from Nov to Dec 2021

3. Using the most recent data from the Industrial Production and Capacity Utilization Report determine

the following:

1. By how much did total industrial production grow from the base year to the most recent month?

3.5%

1. By how much did total industrial production change from the prior month?

1.5 %

1. Which major market group (including all subcategories) grew the most and least year-over-year? Which contracted and by how much?

Consumer Goods grew: 2.2 %

Construction contracted: -1.3 %

1. What is the estimated average total capacity utilization in the U.S over the past 30+ years (round to a whole number)?

80%

1. In the most recent month, which stage of process group had the greatest growth in capacity utilization?

Primary & Semifinished:1.6%

1. Which stage of process group has the highest historic capacity utilization rate and what is the rate? Which has had the lowest and what is the rate?

Highest Crude: 85.2 %.

Lowest Finished: 76.8 %

4. Using the most recent ISM Report, determine the following:
   1. What was the overall index? Does this suggest an expanding or contracting manufacturing sector?

Overall index: 57.6%

Manufacturing sector is still growing but at a slower rate compared to last index

 

1. Which manufacturing sectors were growing the fastest and slowest? Why?

Fastest: Prices: 76.1.

Slowest Inventories: 53.2.

Inflation is driving up the cost of production. Inflation has slowed the growth of inventories.

1. What is happening to manufacturing prices? What might this mean for the economy?

Manufacturing prices

Price rises, implying that the cost of producing things rises as a result of inflation. This might     suggest that we’re on the verge of a recession.

 

 

 

 

 

5. Using the most recent data from the CPI and PPI reports, determine the following:
6. What was the inflation rate for all items?

7.5

 

1. What were the monthly annualized inflation or deflation rates for Apparel and Gasoline?

Apparel: 5.3

Gasoline: 40

1. Compare the most recent year-over-year overall inflation rate with the year-over-year Core inflation rate and explain any discrepancy?

Food and energy, which are the most volatile categories in the CPI, are not included in the Core inflation rate.

Overall: 7.5

Core: 6

Difference= 1.5

 

1. Based on the annualized monthly inflation rate, how much more would a typical consumer that spends $10,000 a year on the CPI basket have to spend a year later as a result of inflation?

Goods that costs $10,000, will cost (1.075*10,000) = $10,750 with  7.5% inflation

1. What was the actual CPI index in the most recent month for all goods? Based on this number how much did prices increase from the base years?

CPI Index Jan 2022 = 281.148

(281.148/100)-1 x100 = 181.148% inflation

 

1. Determine the monthly inflation rate for total final demand goods/services that producers like Walmart buy. Based on this rate and assuming they purchase an average of $10,000,000 per month in inventories, how much more or less will they spend from the start to the end of the month?

Price Change from Dec 2021 to Jan 2022 = 0.6% increase

Spending would be(0.006×10,000,000) = $60,000 more in Jan than they did in Dec

 

1. Based on the most recent PPI, would you anticipate inflation of deflation in the CPI?

Food and energy, which are the most volatile categories in the CPI, are not included in the Core inflation rate.

 

6. Using the most recent Personal Income and Spending Report, determine the following:
7. What percent of personal income was earned in:
   10887. Wages and salaries:10887.4/21043.6 = 51.7%
   10888. Personal current transfer receipts:3897.7/21043.6 = 18.5%
8. Personal income receipts on assets? What was the non-annualized personal income?

3,011,900,000,000

1. What proportion of disposable income was saved and how much did the percent change from the prior month?

In January, 6.4%  disposable income saved. Decrease of 1.8% from 8.2% in Dec

1. Based on “c” above, is this a positive or negative sign for future economic growth?

Inflation is driving up the cost of production. Inflation has slowed the growth of inventories.

1. Calculate the proportion of disposable income that is accounted for by “personal interest payments”. Is this within the acceptable range based on the economic indicator’s text?

266.3/ 18,276.3 = 1.4%

It is within acceptiable range

 

7. Using the most recent adjusted monthly data from the Retail Sales Report determine the following:
8. Percent and Dollar change in Retail & Food Service from the prior month. Round percent to the hundredths.

Percent Change: 3.75%

Dollar change: 22,487Million Increase

1. Which kind of business witnessed the greatest annual percent change and by how much?

Food Services & drinking places : 27% (Table 2)

1. What percentage of retail sales were non-store purchases? Do the majority of people shop in physical stores anymore?

Total = 679,776,000,000;

Non-store = 94,272,000,000

94272/679776 = 13.87%, Yes, Majority still shop in physical stores

Table 2