The February Employment Report 2018 released by the Bureau of Labor Statistics can help an economist come up with various conclusions regarding the country’s GDP and the inflation. Although the unemployment rate did not change, more than 700,000 jobs were created across various sectors. The unemployment rate has been declining since February 2016 and it has been at its lowest, remaining constant at 4.1% for five months. Although new jobs were created, the labor force grew by close to a similar number ─ a good explanation why the unemployment rate did not decline. There exist relationships among economic variables that can be used to predict the GDP and the inflation rate over the period covered by the employment report.
Considering the fact that unemployment rate remained constant over a five months period, it would be expected that the inflation rate did the same too. There exists a negative relationship between the unemployment rate and the inflation rate which means that for one to decrease, the other must rise demonstrated by the Phillip’s curve. For the February 2018 data, there was no significant change in the unemployment rate and the inflation must have remained below the Federal Reserve’s target of 2.0 %. On the other hand, job creation is a sign of a growing economy. The creation of more than 700,000 jobs indicates that there is an increase in production and that the economy is on a growth path. The economy has been growing consistently in the previous months and the trend was expected to continue.
In conclusion, the relationships that exist among the economic variables can help reach conclusions about the economic state. However, there are many assumptions made and other factors may result in the reality differing from the expected.
