adress the impact that changes in real gdp could have on the logging idustry?

Question

also the impact of unemployment rate and inflation rate as measured by the cpi

Answer 1

This is likely to be more noticeable in the converse (ie, impact of changes in employment and output in the logging industry on real GDP), particularly because logging is not a substantial part of the national economy (and because so much of our timber is imported), although it plays a significant role in certain local economies.

Logging is linked to the rest of the economy via the construction sector (as structural support, although it is one of many materials utilized), business services sector (as paper and paper products, also used in shipping), and consumer products sector (mostly in terms of packaging, as well as some paper usage). As such, fluctuations in logging output should be anticipated to have a direct correlation (up with up, down with down) on future aggregate demand.

When you ask about CPI, note that there are multiple CPIs (ie retail, commercial, consumer) as well as regional equivalents (the basket of goods pertaining to CPI in the Midwest will be different from that in certain East Coast cities, and the costs of bringing certain goods to market will vary greatly). One would expect that as the market price of logging goods (whether due to changes in supply holding demand constant, or vice versa) shifts, it will have a proportionate impact on only those measures of CPI which include logging goods as a component.

Answer 2

A growth in real GDP means true growth in output and economic activity. Assuming we need lumber inputs to build and continue growth, this would increase the demand for lumber products and people with logging skills. Loggers would have a better chance of being paid more since their skills and output product are in greater demand. Because lumber is a major input, the price of many products could increase, i.e. homes, furniture, flooring products, all construction, etc. This could possibly lead to cost push inflation and result in the CPI increasing at a stronger rate. Economic activity when stimulated would reduce unemployment and as more people move/work/earn/ and then spend, this also puts upward pressure on prices. This type of inflation in called demand-pull (too many dollars chasing too few goods). This type of inflation occurs when unemployment is low and spending is strong. I believe demand pull inflation would be more likely the case vs. cost push inflation.