Macroeconomic Impact on the US Stock Market

There is a direct link between the US stock market and the way in which macroeconomics influences it. In terms of investor interests, such aspects as sales, cash flows or debt loads of a company in question are not enough to understand its future and position on the market. There are other macroeconomic indicators that have a huge impact on the US stock market and the position of a company within it. Acquiring economics degrees is not necessary to understand how it all works. However, an investor should have a clear understanding of all key aspects that have its impact on the stock market.

The following concepts have a huge influence on the US stock market. The first one to mention is the unemployment rate. It indicates the strength and the development of the economy. The lower the unemployment rate, the more favorable the investment climate is going to be. What is more, low unemployment rate presupposes graduates will be able to get a job and pay off their student debt faster. According to the information provided by the U.S. Bureau of Labor, the entire gross domestic product of America is produced by 80% of workers. Investors, in their turn, pay a lot of attention to this number. When the employment report is good, stocks rise. When the report is bad, they obviously fall.

The next macroeconomic indicator that has an influence on the stock market is Gross Domestic Product (GDP). To put it simply, this is an indicator of the economic health of a country. To better understand what GDP is, consider the following: this is the total number of all goods and services that are produced and provided in one particular country. In this case, we are talking about the GDP of the United States of America. The direction of the US stock market is defined by the change of the GDP.


Such aspect as retail sales demonstrates consumer confidence. During the long period of drop-off in retail sales the economy of the country can experience a certain downturn. Another reason why viewing a retail sales report is so important is that it provides an investor with the latest data. It is important to keep in mind that a crash on the U.S. stock market will have its negative impact on the GDP of the country. If stock prices remain depressed for a long period of time, it will be impossible for a business to expand. As a result of that, the company will not be able to pay its employees, in case cash money has been invested in stocks. Stock market crashes typically happen because of an economic crisis. The most recent one in the history of the United States of America occurred in 2008.


The final macroeconomic indicator to mention is the consumer price. What is more, the Consumer Price Index shows what the average change in the consumer price is. The prices for homes, medical items, food, energy and a lot of other goods are taken into consideration when measuring the price change. Here’s how the consumer price influences the US stock market: when the consumer price for basic goods is high, it means a consumer will not have any extra money for discretionary items (e.g. buying coffee to-go every morning). A company, in its turn, may not be able to hire new employees or to expand because of high PPI numbers. The rise and fall of the stock market depends on the signals provided by these two indicators.


Due to the fact that the U.S financial market is very developed, it is easier to attract investors. The U.S stock market is not the same as the economy of the country and vice versa. Yet, the situation on the stock market helps to better understand the current state of the economy. Investors will buy stocks if they are confident. In order to feel confident, they need to make sure the economy of the country is growing. U. S stocks affect the economy of the country in a number of ways. What is vital to highlight is that individual investors are allowed to own a part of a company. In addition, America has a free market economy. Finally, the absence of the stock market would only make it possible for private equity investors to benefit from the free market economy financially. If a person is interested in beating inflation, the most reasonable thing they should do is to invest in the stock market.


The economic indicators mentioned above are widely discussed during class as well as when an economics student gets assigned macroeconomics essays and other writing tasks. The impact of macroeconomics on the US stock market is among the most common economics essay questions. However, a lot of students often have trouble dealing with such assignments which often results in seeking economics essay help. One can easily come across an economics essay writing service online. However, one needs to be certain it is trustworthy. If you do not know how to write my economics essay and are looking for economics essay help, address your request to an agency that has many years of experience working in this field. In other words, you need to get assistance from an economics essay writer who has acquired work experience in the area. Not every economics essay writing service can offer you that. There is no doubt the task to write my economics essay can be rather overwhelming. For this reason, relying on economics essay help seems like a reasonable thing to do. If you want a professional to help you write your economics essay, choose the service that has gained a good reputation on the market.

Lewis Mitchell

Lewis Mitchell is a freelance writer from the U.K. who specializes in technology and Internet niches.