Challenges to U.S. Economy

Best Growth Stock – By the end of last year, over a period of last year’s quarter , the stock market saw economic recuperation from the recession which inundated almost all the economies of the entire world. The earnings made by private and public enterprises are increasing at a steady rate, but it has to maintain its position and endure the new challenges posed to the economy like the Egyptian crisis and its political turmoil which can grab the whole economy in its grip.

The earnings of the corporate giant have to be both high and regular to afford a healthy and stable world economy after the great economic slowdown. The expansion of economy is being matched by the older standards but still there is a need to renew the strategy to meet the global standard all over the globe.

The economy of the world leader today, United Nations is observing the securities traded in its market to be reasonably priced, neither too low nor too high. The interest rate in the country are not up to the expectations of the investors and the prices are roaring high inspite of the measures to keep check on the inflation rates of the same.

The rates are even expected to take an upward trend according to the data recorded. The investors are shifting from bonds to securities. Stock market is although risky but is accompanied by high returns which attracts investors who crave for more profits.

Various global depositary receipts and American depository receipts have outweighed the mutual funds in the market.

The economy is facing a lot of challenges in its way to advancements. One of the major hurdles in its path are decline in the real estate prices in the country. The recession touched the country in this sector to a great extent. The stagnant rate of employment is also one of the reasons behind the same. The unemployment in the economy hinders its GDP as well as effects the standard of living of the people to a great extent.

The rise of saving rate and less consumption by the consumer is also effecting the economy because money is not coming into circulation as per the rate which was expected. Investment which is the need of the hour is also not taking place as per expected. Excess credit given by banks at low interest rate to give a kick start to the economy is also one of the hindrances for the same. The monopolistic views of the investors in the U.S. has also resulted into low investment and thereby giving rise to a slow economic system.

The crisis of Egypt, its political turmoil has also resulted in the weak economic structure. The hike in the oil prices is going to touch all the parts of the world, being it the era of globalization.

Moreover, the unfavorable balance of payment in certain sectors adds to the cause. The investment which is demanded in the area of infrastructure and economic growth goes into making clearing the deficit of the same.