Effects of 9-11 on American Economy
The national average weekly price was $1.53 per gallon and $27.66 per barrel on September 10, 2001; the day before 9/11 attacks. On the day of the terrorist attacks, the price of West Texas Intermediate crude rose to $29.59 a barrel; an increase of 7%. Oil and gas prices began to increase rapidly in 2004 as a result of American-led invasion of Iraq. Gasoline prices rose to $4 per gallon in summer 2008 (Miley). However, recently, average price of gasoline throughout 2013 is estimated to be $3.38 by U.S Energy Information Administration (“What Is the Outlook for Gasoline Prices for 2013 and for 2014”). Although the gas prices are steady between $3 and $4, it is $2 approximately more than it was before 9/11 attacks (Miley).
Housing in America also had a significant impact due to 9/11 attacks. The average price for a house in America in 2001 was $156,600. The home ownership rate during the first half of the year was 67.5%; meaning that 67.5% of the population owned a house. As Miley explains, `The fed funds rate [is] the interest that banks charge each other for short-term loans [and it] influences rates on other loans, such as mortgages.’ The Federal Reserve had a target federal funds rate of 6.5% for 2001. Four fed rate cuts were made after 9/11 and the fed funds rate was 1.75% in the end of 2001. Housing prices rose rapidly following the terrorist attacks. The median home price was $221,900 in the year 2006. From 2000 to 2006, housing prices escalated an annual rate at 8.26%; while in the 1990s, the annual increase in housing rate was 4.22% (Miley).
Unemployment rate also had bad effect in America due to 9/11. The unemployment rate was just 4.9% in 2001 before the 9/11 attacks. But after the attacks, approximately 600,000 jobs were lost. Of those, 226,000 jobs were in travel and tourism. Not only that but also 1,100 businesses were disturbed at the World Trade Center. The unemployment rate was 5.7% in the end of the year (Miley). In 2011, the unemployment rate was 9.1% and as of October 2013, the unemployment rate was 7.3% (United States).
Gold also had a major impact due to 9/11. The average price of gold on September 10, 2001 was $271.50 per ounce. A week after 9/11, gold prices increased by 8%. By the end of 2005, the price per ounce of a gold doubled compared to the price before terrorist attacks. In 2006, the price of one ounce was gold was in mid $600s and in March 2008, the price per ounce of gold quadrupled to more than $1,000 compared to prices before attacks. The price of gold is playing around $1,200s in beginning 2013. After the 9/11 attacks, the price of gold per ounce has increased more than 600% and in contrast, U.S. dollar has drowned by one-third of its value (Miley).