We got a bit of surprising news today, hearing that new jobless claims fell to 530,000 last week.Going into today's announcement from the Department of Labor, analysts had been expecting to see an increase of 5,000 new jobless claims last week. This marks the third week in a row that we have seen new jobless claims fall.
Unemployment continues to be a big problem for the nation, having a significant impact on consumer confidence and therefor consumer spending.
Consumer spending is a major component to the U.S. economy, making up about 70% of the total economy, so spending has to be strong in order for the economy to continue its rebound.
Yesterday the Federal Reserve stated that things are improving, but that consumer spending continues to apply pressure to any economic recovery that we could be seeing. The Fed noted that the main factor weighing down consumer spending is continued job losses, so today's news is definitely good news for the market.
With unemployment still running very high, and expected by some to take until 2014 to return to a normal 5%, there is still a long way to go before we can breath easy. It is very encouraging to see new jobless claims drop, but you can be sure that more job losses are on the way, and for the roughly 15 million people that are looking for jobs, things are still looking pretty bleak.
What are your thoughts on the current economic recovery? Do you think the American economy has turned the corner and people will start finding jobs again, or should we expect to see sizable jumps in unemployment in the months to come?
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Reader Comments (Page 1 of 1)
9-24-2009 @ 6:01PM
bi11jon said...
College Students (with higher enrollment) went to school and took themselves out of the job market. Other people without jobs could then pick up some of the jobs left behind by the students. So there are less who are "jobless". I wonder if this happens every fall....