It is now January 2013 and according to some people, the upper class perhaps, the recession is over and the economy has “bounced back.” However, I have yet to feel the rebound of this bouncy economy. The first quarter of 2013 has no concluded so naturally in order to see what the experts say about the expanding and contracting of the economy we must look to the previous quarter. In first quarter of the year the economy expanded 2 percent and 3 percent at the end of 2011. Towards the spring of 2012, the second quarter, the economy grew only 1.3 percent and come close to a standstill. As of now, I think it is safe to say the economy is constantly contracting and expanding. It is a real give and take type of scenario. The economy sure has not bounced back enough because the unemployment rate was between 8.1 and 8.3 percent all of 2012. There is no way that that is an acceptable unemployment rate for an “expanding” or “growing” economy. Before we get into what the current prime rate is, I think it is imperative that we first explain what a prime rate is.
The U.S. Prime Rate is a commonly used, short-term interest rate in the banking system of the United States. All types of American lending institutions (traditional banks, credit unions, thrifts, etc.) use the U.S. Prime Rate as an index or foundation rate for pricing various short- and medium-term loan products. It is important to keep the prime rate consistent and better for business and individual because it gives them the chance to compare it with other similar loan rates. The projected prime rate number are expected to go from 3.25 percent to 10.1 percent between now and 2043. The current credit card interest rates seem to be decreasing a bit which is also a good sign that the economy is coming back on track. From November 2012 to January 2013, the credit card interest rate went from a fixed rate of 14.02 with a variable of 14.58/14.59 to a fixed rate of 13.33 percent with a variable of 15.13. As of December 2012, inflation in the United States was recorded at 1.70 percent by the Bureau of Labor Statistics.
The national inflation rate has averaged 3.36 percent from 1914 to 2012 with the exception of June 1921. That time was also referred to as the great depression and inflation was at an all-time high of 23.70 percent. Similar to the prime rate, we must define what gross domestic product is in order to the feed the reader with information about it. Gross domestic product (GDP) is the output of goods and services produced by labor and property located in the United States. It was reported that in the third quarter of 2012, the annual GDP increased 3.1 percent according to the estimate released by the Bureau of Economic Analysis. In conclusion, the economy effects many ways in which we live our day to day lives. With the economy being more unpredictable than ever renders us almost in a constant state of financial fear and self-doubt. Before the recession it is possible that an individual did not give that much thought to buying a car. Now, the decision to buy a house or a car is similar to that of a life and death situation. Any wrong move could have crippling effects on your credit and financial bed that you have so neatly maintained.