Competency
In this project, you will demonstrate your mastery of the following competency:
- Make decisions informed by macroeconomic principles and the business cycle
Scenario
You work for Quantigration, Inc., a semiconductor manufacturing plant headquartered in the United States. Capitalizing on advancements in its product, Quantigration has aggressively expanded and acquired fabrication plants and workers around the world. You have recently joined the EWC, an employee-run Economic Watch Committee.
Your department manager, Gregory, is putting together his staffing budget for the upcoming year, which will need to be approved by Quantigration’s human resources manager. Because you are a member of the committee, he has asked you to help him consider a department-wide increase in salaries. He’s asked for your assistance in researching current economic factors and the current business cycle to see if this is a good time to do so. Although many other factors will go into his final decision, he’s asked you to decide if it makes sense from a macroeconomic perspective.
Directions
Recommendation to Gregory Gregory has asked you to make a recommendation as to whether or not this is a good time to increase salaries department-wide. Although Gregory is familiar with macroeconomics, he wants you to articulate your analysis so that a nonexpert might understand. To do this, be sure to define key macroeconomics terms to show how they are used in your decision making.
- Start by determining where the United States is in the business cycle based on the following national data for the past 12 months:
- Employment, including the unemployment rate and labor force participation rate
- Gross domestic product (GDP) growth rate
- Inflation (For the purposes of this assignment, you may choose which consumer price index [CPI] to use.)
- Federal funds rate
Remember to use data from official government sources such as the FRED and BLS (which you can find in the Supporting Materials section). Make sure to include this data in your report in the form of graphs or tables. You may export these graphs directly from FRED.
- Describe the impact of current trends in national inflation on the cost of living.
- How might this national trend impact Quantigration’s employees? When describing this impact, reference the consumer price index (CPI) that you used above.
- Describes the impact of the labor force participation rate on a region. For purposes of this project, you may select any location in the United States to guide your regional investigation. You should address:
- National and regional labor force participation rates
- To find the labor force participation rate for your region, see the Bureau of Labor link in the Supporting Materials section. The national rates are available on the FRED website.
- National and regional employment and unemployment rates
- National and regional labor force participation rates
- Finally, make a recommendation to Gregory supported by your macroeconomic data and analysis.
What to Submit
Every project has a deliverable or deliverables, which are the files that must be submitted before your project can be assessed. For this project, you must submit the following:
Recommendation to Gregory (500–1,000 words) Write a recommendation to Gregory on whether or not this is a good time to increase salaries department-wide. Make sure to include data from FRED in the form of graphs or tables. You may submit this as a Microsoft Word document or PowerPoint presentation.
Supporting Materials
The following resource(s) may help support your work on the project:
Citation Help Need help citing your sources? Use the CfA Citation Guide and Citation Maker.
Website: Federal Reserve Economic Data (FRED) This website from the Federal Reserve provides easily searchable economic data, from a multitude of sources, available in downloadable graph and spreadsheet forms. To learn more about this, see the Export Options page on FRED’s website.
Website: Bureau of Labor Statistics (BLS) This website from the Bureau of Labor provides data on employment, inflation, and labor force participation. However, these data sets are also available at the FRED website.
Website: U.S. Bureau of Economic Analysis (BEA) This website from the U.S. Bureau of Economic Analysis provides data on gross domestic product (GDP). However, these data sets are also available at the FRED website.
Website: U.S. Census Bureau QuickFacts This website from the U.S. Census Bureau provides commonly requested demographic data.
Website: Local Area Unemployment Statistics: Monthly Error Information This website from the Bureau of Labor Statistics gives data on the labor force participation rate by state.