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Macroeconomic Forecast Paper
The Ford Motor Company
November 16, 2004
Economic indicators and forecasts are an integral part of any corporation's everyday business. They help management implement present and future endeavors. This information can be used to make adjustments to improve present situations or to determine plans for future plans.
Team B will analyze three plans for the Ford Motor Company. Those plans are expansion into China, research programs and fuel efficiency vehicles. Team B will use various economic sites, like the Mortgage Banker's Association site, to decipher forecasts on six economic indicators. Those indicators are gross domestic product (GDP), employment growth, unemployment, housing starts, retail sales and interest rates. Team B will compare and contrast this information to recommend any needed adjustments to Fords three operations.
In researching the economic forecaster's reports, Team B found the following the differences in the statistics: The Congressional Budget Office uses monthly data published by the Board of Governors of the Federal Reserve System to calculate two-year averages of nominal short and long term interest rates. The forecast of short term interest rates were compared using historical values for two measures of the interest rate on three- month treasury bills: the new-issue rate and the secondary market rate were used. The forecast shows the new-issue rate corresponds to the price of three-month bills auctioned by the department of treasury, meaning it reflects the interest actually paid on that debt. The Congressional Budget Office's secondary market rate to the pr ...