Closing The Gap

http://www.economist.com/news/finance-and-economics/21596529-americas-labour-market-has-suffered-permanent-harm-closing-gap

                  This article talks about how the American Labor market might have gone through permanent damage, regarding the labor supply. The chairman of the Federal reserve, Janet Yellen concluded that she would consider more than just the unemployment rate to consider whether or not the labor market is complete. She further added that the labor market is currently "far from complete".
                 The article further shows that from 2007 till 2009 the proportion of people with jobs declined from 63% to 59%. This just means that the output gap has not closed at all. However, if the unemployment rate of those years is looked at, it is at the "natural rate" of 5.5% suggesting that the output gap has disappeared and finally looking at those unemployed in the last six months of that time shows that the output gap has closed up completely. These are three different ways Nomura Securities, a bank used to calculate three different labor market indicators.
                  The article also suggests that the output gap might be overstated for the Fed's purposes mainly because of the fact that people unemployed for a long time do not get much attention from recruiters even though they might be actively searching for a job.

Near-Zero Interest Rate Policy

http://thehill.com/policy/finance/economy/215802-yellen-vague-on-rate-hike-plan

The Federal Funds Rate, the interest rate at which banks with balances at the Federal Reserve borrow from one another, is one of the most important interest markers in the U.S. economy. It serves as a point of reference for other interest rates and has profound influence upon overall economic activity, helping to both stimulate the economy and control inflationary pressures. When the Fed wishes to spur economic growth, it reduces interest rates, when it seeks to dampen economic activity, the inverse.

The current target for short-term interest rates is between 0% and 0.25% as set by the Federal Reserve. Responding to the 2008 financial crisis, the Fed swiftly pivoted to ratchet down the Federal Funds Rate to near zero, seeking to bring rates as low as possible to keep the economy afloat as well as to help banks earn a higher “spread” between borrowing and lending rates. Since 2008, the Fed has kept rates in this 0-0.25% range, believing the U.S. economy incapable of sustaining positive growth without continued central bank stimulus.

            In their article, Peter Schroeder and Vicki Needham suggest that the days of near-zero interest rates may soon be a thing of the past. Amid a recovering yet still complicated economy, Federal Reserve Chairwoman Janet Yellen must determine not if she should raise interest rates, but rather when. On one hand, we can see that the economy has clearly improved: more jobs have been created than were lost in the recession and unemployment rates have dropped from nearly 10% to 6.2%. It should be cautiously noted, however, that it took five years to reach this point and that the labor market is still not fully recovered.

            When it does finally decide to raise interest rates, the Fed will likely take a slow, deliberate approach. Most economists predict the initial increase to occur mid-2015, with a 30-month window between the first and last rate hike. I believe that a near-zero interest rate policy should be judiciously implemented in times of economic hardship. If the Fed considers the economy to be fully recovered, I believe it should raise the interest rate as soon as possible. I am interested in the various pros and cons associated with the speed at which interest rates are raised, why the Fed will likely take a slower approach and the reasoning behind it. 

McDonald's faces 'millennial' challenge

http://finance.yahoo.com/news/mcdonalds-faces-millennial-challenge-010500618.html

McDonald's sales have been stagnating for the past few years in many of its global locations. Its share of customers between 19 to 37 has drastically been decreasing. It is likely that those customers have switched to the "fast-casual restaurants" such as Chipotle or Panera Bread.

 A strategy for McDonald's to include the younger generations into its regular consumer base while not alienating many of its current customers is essential for it to continue to compete. As of now, McDonald's hopes to reach out to the younger customers by revamping its public image. Many ideas are being considered by the company, including purchasing a growing "fast-casual" chain, but nothing is certain yet.

Government Spending

http://blogs.wsj.com/economics/2014/07/30/one-big-factor-in-the-economic-uptick-government-spending/


        In the article One Big Factor in the Economic Uptick: Government Spending, Josh Zumbrum talks about and illustrates the government spending being it federal or state and how the total spending has gone down forcing budget cuts in the necessary fields. One may think that government spending decreasing is a positive because we are in so much debt but in reality it lows the GDP and our economy can't keep growing.

The spending between state and government needs to be overlooked in a way where they aren't spending money on unnecessary items, and they don't spend too little so our GDP can keep growing and