Money Talk Daily

Posts Tagged ‘unemployment rate’

Bleak Outlook for those who are Unemployed The Numbers Paint a Grim Picture

We are all aware that money is tight for a lot of people these days, but somehow when the actual statistics come out it can still be quite shocking. A recent article by the Associated Press reports that over 20 million people in the US received unemployment benefits over the year 2009. The unemployment rate for the year reached a whopping 10 percent. It is easy to see why sales of many products are way down when one in every 10 people is out of a job.

It has been a Drawn out Struggle for Some

While there are not as many workers being laid off or let go as there were in recent months, many employers are still reluctant to re-hire until they see a dramatic upturn in the economy. Some who have lost jobs have been fortunate and found work again, even though some of them find themselves in new jobs that aren’t optimal. Lifestyle adjustments are often required, and people who have taken on casual jobs just to stay employed should feel lucky to find work at all. Among those that are jobless, 5.8 million were unemployed for over six months. This circumstance can take a toll not only on the pocketbook, but also on a person’s pride.

The Vicious Cycle

With so many people out of work or working low paying jobs, there is little money being spent. Businesses relying on sales of some sort are struggling to get customers. They can’t hire any more people, because they can’t make enough money to pay them, and they are forced to keep an eye on longevity instead of hiring a few more people in the here and now. Also, the government stimuli are beginning to run out, so there is less money for businesses to work with. Consumers are unable to spend, and companies are unable to hire, which makes the economic crisis geared for a longer period of time.

Just how Long will the Crisis Last?

The unemployment rate is showing signs of declining, but not at a speed that most of us would like to see. Experts are estimating that within a year’s time the rate will be above 9 percent, slightly down from the current 10 percent. With such a scarce job market the government has been forced to extend the term of unemployment benefits beyond the usual 26 weeks several times in 2009 and will likely have to continue to do so, otherwise millions of people will be left with even less to spend.

Job Competition is Fierce

If you are one of the many Americans who is unemployed and looking for work the odds are definitely not great. It is estimated that for every open job there are six unemployed candidates. There obviously are other people to consider. This doesn’t include people that are employed but looking for full time or better paying opportunities.

Try to Remain Positive

It can be tough to stay optimistic is such trying times. Taking a casual job can be humbling, but take comfort in that you are at least working. Try to think outside the box. If you have skills for freelance work, this is a good time to put them to use. Companies are far more likely to offer freelancers work than regular employees in tougher times. The internet has a lot of opportunities open online.

Buffet’s claims

Warren Buffet seems to believe that, despite what other experts are saying, consumers won’t find debt relief any time in the near future.

“Everything I see about the economy is that we have had no bounce,” according to Buffet. “There were a lot of excesses to be wrung out and that process is still underway and it looks to me that it will be underway for quite a while. In the annual report I said that that economy would be in shambles this year and probably well beyond, and I think that is true.”

Buffet claims the biggest contributor to the lagging economy will be unemployment. Buffet believes that this unemployment spike will continue to “depress consumer demand for everything from energy to cars and homes.” Unfortunately, a lot of the economic turmoil is hinged on consumers’ spending again. The signs are that this is unlikely.

The economic turnaround

Ben Bernanke, chairman of the Federal Reserve, has cited nascent signs of economic recovery abounding throughout the market. He has been a strong proponent of consumer anticipation of better times on the horizon. However, Buffet’s argument is based on some telling facts about the market. The decline in home building dashed many hopes that the economy and credit industry turned around enough to once again push people to start buying big ticket items.

Buffet claims that debt relief for the masses is a long way off because of the seemingly unstoppable unemployment rate. “It looks like we’re going to need more medicine, not less,” he stated recently, implying that the country will need a second stimulus if it is ever to recover.

Cautions for the future

Despite some changes and government intercession, Buffet claims that more is needed. He also believes that the stimulus and programs the government has already introduced will impact the economy in adverse ways. “We have done things that raise the probability of high rates of inflation at some point,” he adds. He said that some of the government’s actions were necessary, but could drive down the value of the dollar to record lows.

People’s futures

So people are left to wait it out and see what results the stimulus really will bring. Many people have seen the fall of large corporations and bankruptcy filings by huge companies. They take this as signs to be cautious about their own finances, and make do as opposed to going out and buying again. However, everyone agrees that consumer buying is key to true economic resurgence. Without confidence in the market, spending on large purchases seems imprudent, and buying a house is not exactly like buying a candy bar. Consumers are opting to go without rather than stretch budgets in murky waters.

Despite Buffet’s words

Despite what Warren Buffet is professing to the public, people are going to have to make their own judgments on what their future holds. They’ll have to be vigilant with finances to get debt relief, and still have room to save for retirement, college, and emergencies. All in all, only time will determine how well the economy will recover, and what it will be like when it does.