The New York Times Article “Steady U.S. Job Growth Sets

The New York Times article â€Å"Steady U.S. Job Growth Sets Stage for Fed to Raise Interest Rates† shows that the current state of unemployment in the US has widespread effects on the economy. Currently, the US has seen an increase in the number of jobs available which has resulted in a decreasing jobless rate, an increasing labor participation rate, and the outlook on wage growth. The economy is experiencing low unemployment rates, partially due to an increase in 235,000 jobs this past February according to the US Labor Department. With the current volume of available jobs, the Federal Reserve, known colloquially as the Fed, considers the jobless rate, the rate at which those without jobs can find them, to be near full employment, implying†¦show more content†¦By the macroeconomic theory learned in Economics 103 this concerns the unemployment rate, interest rates, The Fed, aggregate demand curve, monetary policy, and inflation. The Fed is cautious of raising interest rates. As interest rates rise, the cost of investment increases and therefore demand for that investment decreases. This causes a leftward shift of the aggregate demand curve as higher rates and relatively more expensive investment trigger a decrease in aggregate demand (G1). Additionally, in order to raise interest rates, the Fed must sell government bonds thus removing reserves from the banking system and reducing the supply of federal funds - causing rf to rise (G2). However, in the event the Fed fears high inflation, than they need to use a contractionary monetary policy, a policy used to fight inflation, to reduce the money supply, increase interest rates, and shift AD to the left (G3). By doing this it increases the cost of borrowing and therefore decreases the GDP (gross domestic product). The decrease of the unemployment rate also causes an increase in the stock market, which the economy is currently experiencing, because when more people have jobs, then they have more income to be invested. Additionally, if the Feds keep interest rates low, consumers have lower interest expense combined with a higher income and thus have more money to spend. This causes a ripple effect of increased spendingShow MoreRelatedJohn Godrejs Myth 10 : Growth Is A Viable Option For The Modern Day.1156 Words   |  5 PagesOpinion 10: A Steady-State Economy is a Viable Option for the Modern Day Unsolved problems lead to radical propositions. Dinyar Godrej’s article â€Å"Myth 10: Growth is the Only Way† is an example of one such radical idea stemming from the unsolved issues of economy and climate. Godrej’s article uses ethos, pathos, and logos in order to appeal to his target audience and discuss larger issues such as climate change and sustainability. 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