Reference no: EM13971603

QUESTIONS BASED ON THE TWO READINGS BELOW:

1. What will be the expected changes to GDP in the next year? Explain by giving details about the impacts, if any, on C, I, G, and NX. Discuss the impact on real GDP vs nominal GDP.

2. Discuss the possible impacts on the labor market and labor participation rate.

3. What does it matter to you as an individual (in whatever country you live) when there are changes to GDP, inflation, or unemployment?

4. Apply economic concepts to the articles. Give your opinion on the topic and support it. Do not just summarize the article. The mere mention of a concept is not sufficient. Explain how it applies to a specific point made in the articles.

No other references are expected to be used except these articles (write 2 pages double space)

Apartment dwellers had to shell out sharply higher rents in 2015 and are likely to get socked again this year as a labor shortage prevents construction of new complexes from keeping pace with demand, a report out Monday says.

Rents for new residents of apartment complexes in the 100 largest metro areas rose 4.8% last year, the sixth straight year of hikes that exceeded a typical 2.7%, according to MPF Research, a unit of property management software provider RealPage. Over the six-year period, monthly rents have climbed 22.5% to an average $1,244, the largest jump in that timeframe in the 25 years that MPF has tracked the data.

Several forces are stoking demand. Millennials are finally moving out of their parents' basements, largely as a result of strong job growth.

But banks' stricter, post-recession lending standards are keeping many from qualifying for mortgages.

Price increases for existing apartment residents generally track those of new tenants but can vary. Rents for existing residents rose 5% last year. The research group expects average rents to increase 4.1% this year as occupancy moderates slightly to 95.4%, and it forecasts above-average rent inflation through 2018. Although rents dipped slightly in the fourth quarter because of seasonal factors, apartment occupancy in the period was 95.8%, up from 95.5% a year ago and modestly below the record 96.8% reached in 2000, MPF says.

Sharply increasing rent makes it tougher for tenants to save up for a down payment to buy a house, says Chris Herbert, managing director of Harvard's Joint Center for Housing Studies.

Many young adults are also putting off getting married and having kids, keeping them in apartments longer, says Greg Willett, RealPage's chief economist. Many, he adds, are gravitating to apartment-rich urban areas to be closer to amenities.

At the same time, many Americans lost homes in the mid-2000s real estate crash and foreclosure crisis, a large portion of whom prefer to rent or are still struggling to snag mortgages.

Thirty-seven percent of U.S. households were renters in 2015, the highest share since the mid-1960s, according to the Harvard center.

Builders are racing to keep up. They completed 232,168 units in the 100 top markets last year, the second highest total in the past 30 years and behind only the 252,348 added in 2014. But the fresh supply was well under the 300,000 apartments planned because of the labor shortage, keeping upward pressure on prices, Willett says.

Some 443,240 units are now under construction, with 311,511 slated to be completed in 2015. Yet that would temper rent increases only slightly, to 4.1%, MPF says.

"It speaks to how strongly demand is at this point," Willett says.

Further delays due to the labor shortage likely would mean even sharper rent hikes, he says. Nearly three-quarters of multifamily builders are having a hard time finding qualified workers, according to a recent survey by Associated General Contractors.

Another constraint is that the vast majority of the newly- built units are more expensive luxury apartments, Willett says.

Nearly half of all renters spend more than 30% of their income on housing, which means they're "cost burdened," according to the Harvard center.

"People are spending more on housing and substantially less on food, healthcare... and the essential needs of life," Harvard's Herbert says.
Economic Roundtable presentation at USD on January 14, 2016:

At least 30,000 jobs have been added to San Diego County each year since 2012 - a higher growth rate than the nation.

However, San Diego created about six low-paying jobs for each high-paying one from 1990 to 2011, Cox said, and those are the types of jobs where wages grow slowly.

High-paying jobs, a salary of $83,000 a year and more, had 38 percent salary growth during the 21-year period. Mid-level ($48,200 a year) grew 13 percent; and low-level ($25,500 a year) grew 14 percent."It's a widening gap and it's been going on for some time," Cox said.

The unemployment numbers in San Diego County might not be all they seem to be, said Tina Ngo Bartel, the director of business programs and research at the San Diego Workforce Partnership. She said the 4.8 percent unemployment rate in November could be doubled if it took into account the "underemployed" - people working part-time for economic reasons.

Although numbers are not available for San Diego, in California as a whole, the 7.5 percent unemployment rate in 2014 jumped to 15.2 percent when it factored in people who worked part-time jobs because they could not find full-time work, said the U.S. Bureau of Labor Statistics.

Panelist Marc Martin, a vice president at Karl Strauss, said the economic impact of craft beer brewing in San Diego grew from $300 million in 2011 to more than $600 million in 2015, and may have a brighter future than a football team.