Ecpnomics for Business Essay Example | Topics and Well Written Essays - 1500 words

Ecpnomics for Business - Essay Example The economy showed signs of a slowdown, though not to the point of recession. The GDP growth of only 1.1% took many economists by surprise and was the lowest rate of growth in three years (Porter & Bajaj, 2006). The GDP reported disappointing end-of-year results for the automotive industry in the U.S. Economists believed this to be the result of high gas prices and the expiration of deep discounts from the summer and fall seasons, which automakers instituted to improve domestic sales. Many U.S, economists predicted a normalization of sales and economic growth within the first half of 2006. Though some experts were not so optimistic. Robert J. Barbera, chief economist at Investment Technologies Group, Inc. and Charles Dumas, the chief international economist at Lombard Street Research in London predicted a slowdown, if not an outright onset of a recession by the end of the year (Porter & Bajaj, 2006). According to Steve Goldstein (2006), "Home Depot rose 3% in the pre-open after it earned $1.3 billion, or 0.60 cents a share in the 4th quarter of year 2006. This rise was up from 0.47 cents a share or $1 billion within the last year. The revenue for Home Depot has risen 16% while store sales were up. The Gross Domestic Product (GDP) according to the Bureau of Economic Analysis had a slow-down in the fourth-quarter growth. This primarily reflected a deceleration in consumer spending (2006). The annual growth for GDP was 3.5% which was unchanged from the estimate in February. According to the United States Department of Labor Bureau of Labor Statistics, the unemployment rate in April 2006 was 5.10 % in Texas 4.6% in San Antonio, Texas, and 4.7% nationally, which was comparatively the lowest rate since 2001. The relationship between supply and demand became precarious as unemployment affected the industry in several ways as Bureau of Economic Analysis showed a rise in personal income