will India leapfrog to 4G directly?

All the recent news in the aftermath of cancellation of 122 2G licenses, India's wireless telecom segment looks a bit uncertain. At least two foreign operators publicly stated that they are exiting India. However if one looks carefully, there are more positives than the negatives. The verdict makes every stakeholder more careful and focused on the long term. Also DoT's Telecom spectrum handling is expected to be more transparent and consistent across. The fact that India's mobile population is growing and has much younger user-base, makes it more attractive to the operators compared to other markets. Also it appears that India's mobile users are getting more interested to use their mobile phone for internet access. That will eventually make mobile data traffic way higher that voice traffic which opens a multiple avenues for new revenue generation compared to plain voice traffic.
  As per the September, 2011 data from TRAI, India's mobile subscription base stands at 907 million and most of them are on the voice network. A large chunk of this userbase is expected to upgrade themselves to smartphones and are expected to generate more data traffic than voice.
With 2G network still growing in India and are expected to continue the trend for another year or so, India's challenge is to allow the 2G operator continue generating revenue while preparing the network for high speed wireless broadband.
In 2010, India had the first auction of Broadband Wireless Access spectrum. The 4G Auction carried on the back of 3G Auction saw 5 winners: Infotel (22), Qualcomm (4), Bharti (4), Tikona (5), Aircel (8) and Augere (1) excluding state-owned BSNL and MTNL. It is interesting to note that top 3 winners are new operators. More interesting aspect is that almost all of them signed up for LTE technology. Now LTE is the most dominant 4G technology with an adoption slowly encompassing the whole world, as per the latest report from GSA (Global Mobile Supplier Association).
For record, GSA report from January, 2012 tells that 285 operators globally are investing in LTE. And DailyWireless reported last year that all the 4G auction winners [barring state-owned operators] have chosen LTE-TDD as the technology.
It is particularly important to mention that China too has chosen the LTE-TDD as the technology for their 4G network. With World's two most populous nation picking LTE-TDD, it is quite apparent that LTE-TDD will enjoy the dominance across world.
What is LTE-TDD
LTE-TDD or Long Term Evolution - Time Division Duplexing [for unpaired bands] was standardized in 3GPP Release 8 as the fourth generation cellular wireless technology. While the back-end is all-IP nework [unlike 3G], LTE comes in two different Radio access variants: Time Division and Frequency Division. TDD variant is asymmetric [between uplink and downlink speed] and therefore promises higher spectral efficiency [i.e. more bits per frequency channel]. Since it uses single carrier frequency, it is also relatively simpler to deploy. Recent trials from Ericsson, Huawei and others claim to reach downlink data rate of 100 MBPS, making it ideal for IP-TV type of broadcast service. With dynamic asymmetric configuration the downlink rate can be  4-9 times faster than uplink rate making it adaptable for different types of data services.
The architecture is made such that an operator can have both TD and FD network helping immensely to retain CAPEX investment made in either of the technologies. 3GPP identified 30+ frequency bands so that spectrum availability does not become a constraint. It can interwork with 3G technologies which means migration from 3GPP is smooth. Since LTE can be deployed over older GSM/GPRS bands, it can also become the upgrade technology for 2G. However that will require complete overhauling of network infrastructure.
There is one chink though, 3GPP did not define the voice technology for LTE. To address the gap, GSMA adopted the GSMA voice over LTE initiative that tries to define VoIP service over 3GPP standardized IMS [IP Multimedia Service] although that service is not part of LTE standard.

Salient points about LTE-TDD

• Technical Standards part of 3GPP release 8
• High theoretical peak user rates of 170 / 54 Mbps (downlink/uplink, 20 MHz)
• Asymmetric uplink/downlink rates to match traffic types for good efficiency
• Peak spectral efficiency as good as competitive standards e.g. WiMAX
• Network infrastructure compatible with LTE-FDD
• Voice over LTE standard is being developed by GSMA
• emerging as the most dominant 4G technology as per the operator adoption is concerned

Migration Path

Migration path from 2G to 4G can be through 3G or bypassing 3G depending on how much the operator is invested in 3G and how many subscribers have adopted 3G. Given that India is lagging behind other countries in 3G adoption, it probably could leapfrog to 4G directly since in India 4G band is allocated far outside the GSM/GPRS band. It is interesting to note that both China and India have allotted the 2.3 GHz band [3GPP band 40] for LTE-TDD service. It would not only save the operator CapEx of 3G infrastructure, it also will be operationally simpler with 4G deployement requiring new model of handset.

Incidentally China Telecom is the first large provider to commit itself to LTE-TDD. In India TRAI is recommending LTE-TDD for femtocells. Femtocells are very small cells, with a diameter of few meters, recommended for wireless broadband access in urban areas.
It's still far by at least one and half years
While the commitment to the technology is quite strong and trials in different parts of the world are very promising, it also should be noted that commercial availability of this technology [both network and handset] is still one and half years farther making it all the more attractive choice for leapfrogging especially for those operators who have a very small 3G footprint. In the meantime, if you are buying a smartphone try not to spend a lot of money since you may need to replace it soon!
Further Updates
There was one aspect that I intentionally did not touch upon. India's Telecom Policy 2011 draft [to be published this April] did not mention about DoT approach on 4G. As if to answer that yesterday Mr. Kapil sibal announced that further auction for 4G is to happen this year. It is to be noted that BSNL has surrendered their 4G spectrum [that was allotted to them in 2010] to Govt. couple of months back. Govt. also can refarm unallotted 2G and 3G spectrum for 4G which means that there are enough spectrum available to launch 4G service.
Update from March, 6, 2012:
Govt. decided to refarm 700 MHz spectrum for 4G service, pooling up more spectrum for 4G auction.[ Report: http://www.thehindu.com/todays-paper/tp-business/article2965040.ece]

From independent standpoint, right approach should be that Govt allot unified licenses to the operators and auction spectrum without association specific generation of technologies and let the operators decide which band they want to use for 2G or for 4G. To protect 2G investment of new operators, Govt is very likely to continue bar roaming in 3G and 4G for next couple years but eventually all technologies will merge to 4G with unrestricted roaming across circles and technologies [i.e. 2G/3G/4G]. That will take some time but handset manufacturers also need some time to build truly multimode [2G,3G,4G] handset. In summary, India's cellular wireless segment is going to be exciting for at least next four years.

What value would FaceBook have if it was based in India?

Apparently my last post did not bring enough contentment to me, hence another post on a similar note. While Facebook IPO [future], LinkedIn and Twitter valuation clearly established the potential of the Identity-realty, the question whether that valuation transcends the boundary is not answered. To make it simpler, let's just consider this question: Would FaceBook be valued equally had it been based in India or China? The question is not as frivolous as it may sound to some. If you look at the user base of Facebook, India provides second largest user-base with 43 million users just after its home turf i.e. USA with 155.5 million users [source: http://www.socialbakers.com/facebook-statistics/]. Moreover while the user-base in USA contracted over last few months, Indian user-base continues to grow. In fact Facebook clearly states in its SEC filing that India is going to be the biggest driver for their growth in next few years. 1.2+ billion population with only 15% penetration, how can anyone ignore the potential!
Similar statistics can be found with Twitter and LinkedIn too, but that is beside the point. Fact is today's valuation of Facebook is done in USA by the USA analysts using the benchmark that is largely driven by USA economic parameters. The fact that Facebook has users across 200 countries, the fact that 3/4th users are from outside the USA, makes it a truly international entity. Even to think of it, a social platform that assimilates so many different cultures and languages, nation boundaries with its local laws under a single computing infrastructure is by itself an enormous feat, only to be matched with that of its mother invention i.e. internet. But I think what makes the difference here is that Facebook has created multiple revenue channels, that it has generated a $1 billion cash reserve before it goes for IPO, that its revenue has grown spectacularly since last year, that it is seen as the second best platform for online advertising after Google, that the online advertising market is seen as an area with immense potential, that it has created a platform that most big companies and even Govt. agencies find difficult to stay away from and more importantly that it has invested heavily in building massive analytics engine that can analyze and provide online reports to suit the customer's need in almost real time. An advertiser can monitor effectiveness and progress of any single advertising campaign that it has launched and get cues on how to make it more PERSONALIZED ..yes PERSONALIZED for every individual user.
As many observed already, the biggest promise of online advertising is its ability to enable the advertisers to reach a customer when he needs the product/service most. Facebook not only understood that, they committed themselves to create the massive engine that sifts through all the online updates in real time and make accurate prediction about user's i.e. customer's behaviour.
This, however is the need for advanced users, those who use smartphones or at the least internet. In India TV Ads still form the biggest share of advertising expense and total annual budget for online advertising is hardly more than few hundred of millions of dollars, which mostly, again, come from American companies.
Does that mean that India does not have any hope for internet-based online service delivery? Actually not that bad if you look at the following two recent reports from IndiaDigitalReview portal. The first one says, "according to India e-Marketing Outlook 2012, conducted by Octane.in, Social Media and Email Marketing will emerge as the top two online marketing initiatives that will see an increase in marketing investments in 2012, as compared to 2011."
Next one tells us that Flipkart, an Indian equivalent of Amazon online shop has raised $150 million of series D funding which pulls the capital infusion value to $850 million. That is a huge number considering that Flipkart sells products to mostly English-speaking internet-savvy customers and its market is entirely limited to Indian subcontinent [where Amazon does not sell] and many of the science and technology books [Books constitutes large chunk of Flipkart's retail portfolio] are to be exported from either USA or UK. One must not forget that its annual revenue this year reached Rs 50 crores. In fact that figure pushed Amazon to launch its India-equivalent service with junglee.com.
   That takes us to the question we started with. What would be the valuation of Facebook if it was based in India? If one could, and there is a biiiiig IF, build Facebook [with the totallity of what it has today] from India, I think, learning from Flipkart experience, it would have reached at least one tenth of its present valuation if not more. And that is not too low considering India's GDP is just little more than a trillion dollar and that more than half of its population is still outside any advertising net.

In the Identity-realty market

• Financial Times report today that Facebook is very likely file for IPO in this year. Analysts expect Facebook valuation to be in the order of $80-$100 billion. 
  Facebook Statistics claim that they have 800 million active users.
• Twitter, as per the last valuation in 2011, is worth $8 billion. It is eyeing 2013 for IPO. 2011 Dec statistics tell that they have crossed 100 million user base.
• LinkedIn last year went for IPO and now its valuation is $7.2 billion. As per the LinkedIn statistics, the total user base in LinkedIn today is 135 million. LinkedIn is expected to touch an annual revenue of $139 million.

Just for a comparison benchmark, IBM's valuation after 100 years of its existence and annual revenue of around $100 billion is $226 billion.
Now consider the revenues of these 'social network' ventures.

• Facebook for instance has three quarter revenue of $2.5 billion.
• Twitter's revenue as per their forecast would be $140 million this year. 
• LinkedIn too is expected to touch an annual revenue of $139 million.

One obvious pattern is that the share-value is not proportional to the revenue for these ventures. It is clear that people are paying more for these companies not for their immediate earning, but what they promise in the long run. But what drives that valuation? If it is not earning, it must be their adoption base and the rate at which they are bringing new users. 800 million is a big number! Although there are lot of discourses about how LinkedIn's Value-prop is wide apart from that of Facebook, there is little doubt that user-base is the basic ingredient of growth and valuation for all these ventures and many others like GroupOn etc. In this social digital era, the capital of social network is user-base and the currency is user's i.e. Your digital identity. Remember what your Dad said? Nothing comes free, dear, in this world! You pay with your digital identity [uniqueness is your basic value] to avail free subscription to the service and the service provider appropriates the value of your identity by aggregating them and creating a virtual market for other businesses e.g. LinkedIn's sizable income comes from payment from Hiring agencies.
So how does it affect you? A lot or not much depending on your perspective. If you are a celebrity, your digital footprint practically defines your public image and you will be extremely careful to maintain what you intend it to portray about you. But if you are a celebrity, you are also a hot property for all these social ventures and to ensure that property remains hot, they need frequent updates about you, from you. Apparently there is a conflict of interest between you and the social venture here.
What if you are not a celebrity?
One nagging aspect of the Internet footprint is there is nothing transitory. Unlike your real conversation, the digital footprint of yours is permanent in nature. They will remain there even after 10-20 years, indexed and ordered by search engines for anyone else to simply search and find out. So even if you are not exactly a public persona, you are public for those who want to find out information or history about you. Liability of the analysis and interpretation of those information that you casually shared in those social sites [blog posts such as this, twitter posts, facebook scruples] are transferred on you with direct impact on how you are viewed as a person. Imagine your new date coming to meet you armed with all these information and validating them as you try to impress her! Or your potential employer collecting all these information before they decide whether to call you or not?
Fact is these kind of researches were carried earlier too, it is just that these online social portals make the information ordered and accessible at the click of a mouse and that is something new.
So what do you do now? Will you stay away from all the fun and frolics of these social casinos? Can you? I doubt it! After all, need to belong is one of our basic needs. Like I mentioned in my last post, each technological shift brings new type of behavioural shift in us. While the immediate and boundary-less updates and faceless nature of the conversations [visual and textual] are the gifts that we will continue to enjoy, we will also learn to live with the liability of information-persistence that these gifts bring with it. Perhaps it will help us to evolve collectively as a better race.
But one thing is for sure, there is no way back!

Technology sweeps that changed our lives

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way...

-Charles Dickens, A Tale of Two Cities

Future history of human species will mark twentieth and twenty-first century as one of the most crucial period for the collective progress of the species. During the last century, history witnessed worst of the exhibitions of human capabilities as well as a few of the future-defining technology-leaps and breathtaking expansion of human knowledge. While the barbarity of Jewish genocides, massive loss of human lives in world-wars, chilling cruelty and cold-blooded ruthlessness of dropping atom bombs, cluster bombs and napalm on innocent people continue to haunt collective consciousness of humanity, unprecedented progression of science with discovery of fabric of DNA, general theory of relativity, quantum electrodynamics, information theory etc., matched with equal advances in technology, have opened a new chapter of human progression. Space travel by Yuri Gagarin, first human footprint on Moon by Aldrin and his team or massive expansion of telecommunication network, electronic broadcast media and invention of modern day computing systems, each by itself is an astounding feat of human progress. However a sweeping change by definition is one that changes the lives of mass and alters the way they operate or live in an irreversible manner. Using that as benchmark, let me pick few technological breakthroughs that brought in sweeping shift to the human civilization. My conjecture is that each of this technology shift also has brought in permanent shift in human psyche.
Sweep One
First major Shift was brought by the invention of telecommunication network in the beginning of this century by Graham Bell. The first few decades of this century saw massive expansion of telecommunication network, across countries, across continents. Suddenly geographical distance was no more the big barrier for human conversation. Continents got closer, people could talk across timezones, across thousands of kilometers.Humanity got the first taste of getting connected across geographical distance.
Sweep Two
Next technology sweep came with the discovery of radio communication. Although Mr. Jagadish Bose did not get his dues during his lifetime, his discovery in 1894 created the path for further far-reaching technological breakthroughs. Though Radio was dicovered in nineteenth century, it was not so much of technology for people till Marcony popularized it in US and Britain in early twentieth century. Radio communication made it possible to send people in space, learn about galaxies, stars, nebulaes. It changed the way human look at entertainment. Radio channels, Televisions changed the concept of human entertainment and brought up a new set of Industries. It made possible for the army to remain in contact in difficult war-terrain. It made possible for the rescue network to function in a disaster-struck area. It made possible for the rich world and poor world to get connected and share information. It made possible for the mainstream human civilization to reach out to people living in the remotest corner of the earth without ever knowing them. It made possible for the world powers to remain in control and connected.
Indeed, Mr. Jagadish Bose continues to touch the human lives even today in way that he may not have ever imagined.
Sweep Three
After communication technologies, if any technology that has impacted the lives of people in a major way is the invention of computing machines. In last forty years, this technology swept the population across continents and created new possibilities that people could not even imagine fifty years ago. It made possible breakthroughs in medical diagnostics. It made possible complex simulation of weather model hugely improving our ability to forecast weather changes. In fact computing technology impacted almost all branches of  human knowledge and in all cases accelerated the advancement of the fields.
It also started a paradigm shift from analogue domain to digital domain. To understand the full import of this shift, consider that the entire gamut of communication technologies were analogue before the onset of computing industry. Telecommunication technologies were lot costlier and error-prone before computing revolution changed the technologies. Moving to digital domain helped bring down transmission errors, cost of manufacturing, equipment size and thereby made them scale for massive number of users and larger area of coverage. Today, we truly live in digital age. Our telecommunication network, both landline and radio, our electronic media all are digital. Needless to mention, this is just the beginning of computing era.
Sweep Four
Computer network that started with DARPA and ethernet have become the most ubiquitous network for both computing devices and communication devices. Internet is one of the most beautiful inventions that became possible because we had this network. Today, internet is bringing people together in a way that was unimaginable even ten years back. Google, Facebook are examples of the immense impact that internet can potentially bring to human collectiveness. National and geographical barriers of information flow have been demolished albeit with a few exceptions. This freedom of information flow has empowered ordinary people  in a way none envisaged earlier. Governmental regimes are finding compelled to change the way of their functioning to cope with this freedom of information. Information in the internet is global and so are the people who are using it.
Collaboration across different continent is not myth any more. Two persons sitting at different corners of the world can work together now thanks to the ubiquity of the internet. Online education is a new phenomenon that has happened only because internet happened.
Sweep Five
Last technology sweep, that we see happening now, is the digitization of information storage. Storage technology has travelled a long way from stone tablet/papyrus/paper to reach the modern age of digital storage. Entire information of the entire human population and its collective knowledge are now ready to move to digital electronic bits to be stored in magnetic/optical media. Interestingly, this news article from BBC tells us that total information about and of the human world was 295 exabytes as on 2007.  BBC refers to an article in the journal Science that effectively says that the figure above was not a speculation but provided by scientific measurement. With new-found popularity and capability of internet, digital storage is expanding almost exponentially. Ten years from now many industry data centres will have similar capacity of storage. This enormous digital data explosion is propelling many new technologies  and growth of new technology startups. Plummeting cost/MB of storage, continued focus to invent chipsets with lower power consumption and expanding storage capacity mean that civilization will have plenty of cheap online storage capacity which would in turn will incentivize higher online footprints. And that will lead us to a new way of working.
In the next twenty years, information about every single individual, be it from Europe, or USA or from India, Srilanka,Singapore,Hongkong,Malayasia or China, will be available somewhere in the vast hyperspace of digital network. Your digital persona will be equally important, if not more, as your physical persona. Your most trivial social transactions, recorded and memorized by the internet for the eternity, will define your past and influence your future. One way of looking at this would be that one not only will need to perform and excel, he/she will have to remain consistent to his past persona, since one's entire past is captured in the digital storage for others to dig and there is no option to erase/modify/hide that. You got to explain every action that you have committed intentionally, unintentionally, unknowingly, frivolously.
But being human is also about irrational choices, about freedom to break consistency, about the freedom to not want to explain one's action. So may be, we will learn to accept our irrationality rather than running away from it; learn to live freely with full knowledge that the past is not something one can do anything about and stop living burdened of the past.
That perhaps would bring our ultimate freedom, the emotional freedom of being oneself all the time, without fear, without guilt.

IT Industry in India and China

In the backdrop of shrill-chill in US to stop outsourcing of software jobs, I thought it would be interesting to take a look at where the software Industry stands in these two countries. In August this year, China dalily reported, " China's software industry revenue expanded at faster pace to 152.3 billion yuan ($23.8 billion) in July, a year-on-year increase of 31.4 percent, the Ministry of Industry and Information Technology (MIIT) said Wednesday.
The software industry's growth rate in July was 2.9 percentage points higher than a year earlier."
   Nasscom, the association of software industry in India in a recent press release also said that," The growth in software and services export is expected to be 16-18 per cent and the sector is slated to bring in revenues of $68-70 billion. The growth in the domestic market is estimated to be 15-17 per cent, with revenues of about $19-20 billion. " The projected growth figure of 15-17% is very likely to come down to 11-12% as the year closes, as observed by an Industry leader.
Interestingly, China clocked higher growth compared to last year while India actually clocked slower growth compared to last year with projection following the trend.  The reason of this skew is quite obvious. India's software industry is majorly [almost 90%] export-based while China's software industry so far is mostly driven by domestic demand. As per NASSCOM, US and Europe contribute around 90% of IT/ITES revenue and with slowdown of those two economies, Indian IT industry has suffered the hit in the growth of this sector.
Chinese software export too were hit this year. Reading the same report from China daily:
Regarding the exports of the software industry, the growth rate fell sharply to 3.9 percent in July, the lowest monthly increase in the first seven months of this year amid economic uncertainty in the United States and the European Union.
Exports in the Jan-July period rose 15.7 percent to $15.46 billion, compared to last year's growth rate of 26.2 percent.
Interesting aspect is both the countries are betting big on the IT export. While Chinese Govt has provided some tax holidays, developed zones and offered incentives to the promoters to grow the software parks, India already has established regulations and tax-breaks [STP and now SEZ] to help the software export. Like China, software industry in India is also centred around few big cities.

Some key data from NASSCOM presentation and outsourcing portals:

1.  India's share in global IT and BPO sourtcing: 55% as on 2010.
2.  India's domestic IT market size in 2010 was Rs 659 billion i.e. $14.3 billion roughly
3.  As per NASSCOM, IT-BPO industry in India directly employs 2.54 million with approx. 2 million in IT alone and expects 10% growth Y-to-Y. Some claim that China too has around 2 million software engineers working as on 2010.
4. China's average software engineer's salary is almost double to the average salary of a software engineer in India and when it comes to customer service representatives, Chinese salary is differs in magnitude. In short resources are constlier in China. More details can be found at Sourcingline.
5. Almost all independent commentators rate Indian IT Industry more competitive compared to Chinese counterpart.

<><><>The table below provides a revenue comparison. As it shows, China's IT industry is dominated by domestic demand while India is slowly developing its domestic IT market.<><>

FY11 software revenue comparison	Domestic	Software Export
Indian Industry	$14.3 billion	$59   billion
Chinese Industry	$23.8 billion	$15.5 billion

One aspect that does not come out well, is China's industry has more product-centric. Huawei, ZTE are globally recognized names and they are showing fastest growth in telecom space [while US telecom companies are shrinking]. In fact Govt. regulation and control helped these companies to grow faster and become formidable competitor internationally. Even in the new world of social media, Govt. censor has helped coming up of Chinese counterpart of facebook and twitter. Weibo for example is a twitter equivalent in China and quite popular too. Renren procliams to be Chinese facebook but wetern commentators think renren is too small to be compared with facebook. However, there is distinct trend of product cumture in China just like India predominantly has services culture. One reason could be that the Chinese language and culture have created the necessary barrier for the product development culture to flourish, just like having the English as the link language in India helped Indians to flourish service culture.
The question however is, can India continue to grow its IT services revenue without the support of strong product-base? With the present negative job growth and associated negative sentiment against Outsourcing in US and Europe makes the question all the more important.  However,if we follow what NASSCOM and likes of Infosys, TCS are talking, Indian IT industry decidedly continue to see themselves as pure-play consulting/services vendors. It is to be seen though with continuous downward pressure on IT services rate and rising inflation pressure on IT salary, how long they continue the profitability and competitiveness of their present model of business.
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Later Updates: Vivek Kulkarni, erstwhile IT secretary of Karnataka wrote in ToI sometime back on Indian IT industry and its issues. I pulled the link for the curious lot: http://articles.timesofindia.indiatimes.com/2011-03-22/edit-page/29174251_1_manufacturing-sector-foreign-currency-tax-incentives

What Rising inflation and rising Unemployment in US indicate?

Economists tell us that when Economy grows, employment grows and rising of the inflation is expected in this scenario. It was told that the rise of inflation and rise of deficit budget is good thing for a growing economy. Opposite also is observed for example in 2009 when the US economy shrank, there was negative inflation and sudden rise of unemployment.
So the known pattern is that expanding economy brings reduction of Unemployment and increase in Inflation.
2011 has broken that pattern.
US economy is stagnant [around 1% growth], Inflation is rising [the table from Inflation Data provides 10 years data ] and Unemployment too is rising [in fact it is already close to 2009 figure]

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Ave
2011	1.63%	2.11%	2.68%	3.16%	3.57%	3.56%	3.63%	NA	NA	NA	NA	NA	NA
2010	2.63%	2.14%	2.31%	2.24%	2.02%	1.05%	1.24%	1.15%	1.14%	1.17%	1.14%	1.50%	1.64%
2009	0.03%	0.24%	-0.38%	-0.74%	-1.28%	-1.43%	-2.10%	-1.48%	-1.29%	-0.18%	1.84%	2.72%	-0.34%
2008	4.28%	4.03%	3.98%	3.94%	4.18%	5.02%	5.60%	5.37%	4.94%	3.66%	1.07%	0.09%	3.85%
2007	2.08%	2.42%	2.78%	2.57%	2.69%	2.69%	2.36%	1.97%	2.76%	3.54%	4.31%	4.08%	2.85%
2006	3.99%	3.60%	3.36%	3.55%	4.17%	4.32%	4.15%	3.82%	2.06%	1.31%	1.97%	2.54%	3.24%
2005	2.97%	3.01%	3.15%	3.51%	2.80%	2.53%	3.17%	3.64%	4.69%	4.35%	3.46%	3.42%	3.39%
2004	1.93%	1.69%	1.74%	2.29%	3.05%	3.27%	2.99%	2.65%	2.54%	3.19%	3.52%	3.26%	2.68%
2003	2.60%	2.98%	3.02%	2.22%	2.06%	2.11%	2.11%	2.16%	2.32%	2.04%	1.77%	1.88%	2.27%
2002	1.14%	1.14%	1.48%	1.64%	1.18%	1.07%	1.46%	1.80%	1.51%	2.03%	2.20%	2.38%	1.59%
2001	3.73%	3.53%	2.92%	3.27%	3.62%	3.25%	2.72%	2.72%	2.65%	2.13%	1.90%	1.55%	2.83%
2000	2.74%	3.22%	3.76%	3.07%	3.19%	3.73%	3.66%	3.41%	3.45%	3.45%	3.45%	3.39%	3.38%
Note: Red indicates Deflation, NA indicates data not yet released.

US Unemployment Rate [source: http://www.forecasts.org/unemploy.htm]

 So what do all these indicate?
Experts warn that these data mean higher taxes, cut in entitlement and welfare schemes and erosion of value of US dollar and treasury bonds. Taxes did not increase yet, but cuts are coming in. Downgrade of S&P credit rating to AA+ already impacted dollar price in international market. Another effect that people are wary of is rise of Fed interest rate. If the economy and inflation continue the same trajectory, to retain investor's interest, Govt. may be forced to increase Fed interest rate.
Now question is this: will you trust these prediction from experts and worry to high BP, sleeplessness, stress, more visits to your therapist and finally reduced life-span? Or will you leave everything to your fate and enjoy your morning coffee and newspaper?
For those who belong to first category, Scientific American has an interesting story to tell. They cite a 'study in the journal Economics and Portfolio Strategy that tracked 452 managed funds from 1990 to 2009, finding that only 13 beat the market average.' They argue that Financial prediction always fails and no one can make a realistic prediction. Economics Nobel laureate Paul Samuelson​ long ago noted in a 1966 Newsweek column: “Commentators quote economic studies alleging that market downturns predicted four out of the last five recessions. That is an understatement. Wall Street indexes predicted nine out of the last five recessions!” Quoting the article, "The world is a messy, complex and contingent place with countless intervening variables and confounding factors, which our brains are not equipped to evaluate." and therefore expert predictions fare 'little better than “a dart-throwing chimpanzee.” '
Dan Gardner's recent book, named Future Babble where he argued why prediction about future disastrously fails and why experts still make predictions and why we still believe in those prediction, could be a good stress buster if you are still worried.