Assess the economic conditions facing U.S. firms in 2012. In you asse

Assess the economic conditions facing U.S. firms in 2012.

In you assessment, be sure to address the economy-wide recovery from the recession of 2007-2009, inflationary expectations, the political situation, expected economic growth, and consumer confidence.

ANSWER

By the start of 2012 the U.S. was out of the recession, and well into a “jobless” recovery. The unemployment rate was still high (around 8%), real economic growth was sluggish (about 1.7% the previous year) with only a modest expected increase in the coming year. Interest rates were relatively low and the Federal Reserve was actively engaged in a policy of monetary stimulus including “quantitative easing”, and consumer confidence was on the rebound but not particularly strong by historic standards. A retail firm such as Walmart could probably anticipate continued sales growth, low borrowing costs, and modest political resolution with the upcoming presidential and other national, state, and local elections.