The major macroeconomic goals of the United States are to maintain low inflation and low unemployment, and this is one of the major jobs of the Federal Reserve, which strives to achieve low inflation and low unemployment simultaneously (Mankiw 2010, 463). This is an ideal scenario because lower unemployment means that more people are working, and when more people work, they have the capability to spend money on goods and services, which stimulates economic output. Furthermore, if inflation is low, that means the money earned from working goes further, or that people can purchase more goods and services when inflation is low. However, these macroeconomic goals can be difficult to achieve since “unemployment is low when inflation exceeds expected inflation and high when inflation falls below expected inflation (Mankiw 2010, 463).
Currently, the United States is not meeting its major macroeconomic goals. Specifically, unemployment levels are not at a desirable level: “US businesses added 166,000 new jobs in September, according to the giant payroll firm ADP, which warned that the job recovery was ‘softening’” (Rush 2013). Amid the government shutdown, unemployment rates will likely worsen, and the Labor Department will not even submit data regarding unemployment during the month of October as a result of insufficient federal funding (Rush 2013). Moreover, most Americans are not confident that the Federal Reserve can maintain low interest rates, as a Rasmussen poll revealed, “that 58 percent of the public lack confidence that the Fed can keep interest rates down and inflation under control, with 17 percent not at all confident” (Nielsen 2013). At this point in time, it is unclear to predict with certainty whether the United States will move closer or further away from its macroeconomic goals, but the current forecast is not encouraging.
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"Major Macroeconomic Goals: Low Inflation and Low Unemployment".
- Mankiw, N. (2009). Macroeconomics (7th ed.). New York, New York: Worth Publishers.
- Nielsen, A. (2013, Sept 18). Americans aren’t confident Fed can keep inflation rate down. Sunshine State News. Retrieved from: http://www.sunshinestatenews.com
- Rush, D. (2013, Oct 2). US adds 166,000 jobs in September amid ‘softening’ economic recovery. The Guardian. Retrieved from: http://www.theguardian.com/
