Publication Details
Abstract
This study presents a comprehensive econometric analysis of key United States financial indicators over the period 2016–2025, examining the interrelationships between gross domestic product (GDP), inflation rates, unemployment levels, monetary policy parameters, stock market performance, and national debt trajectories. It applies different econometric methods which are descriptive statistical, Pearson correlation, ordinary least squares (OLS) multiple regression modeling, and time series trend analysis methods of data science. The analysis framework includes seven macroeconomic variables throughout a 10-year time span based on the data from Bureau of Economic Analysis (BEA), Bureau of Labor Statistics (BLS), Federal Reserve Economic Data (FRED), and Standard & Poor's financial databases. The results indicate that GDP has a statistically significant correlation with both the S&P 500 index and the national debt, while unemployment is inversely related to the federal funds rate. Using a multiple regression model to explain GDP growth through inflation, unemployment, and federal funds rate shows limited ability to explain the variation in GDP growth — with unemployment being the only statistically significant predictor. The strategic period spans over a remarkable challenging macroeconomic environment featuring the COVID-19 pandemic recession, massive fiscal responses, a once-in-a-lifetime inflation explosion, and a cunch in monetary policy. The econometric evidence highlights that labor market conditions remain the primary driver of short-run growth paths but that structural changes have altered the Phillips Curve dynamics.