The Unemployment Rate and its Consequences

Unemployment rate in the United States is on track to reach a staggering 10% by year’s end. This is certainly not good news for Americans. As a result of this news, consumers are "retrenching"—they are saving more and spending less.

Banks are reporting a significant increase in account holders' savings for the almost a year, which means that consumers are not stimulating the economy enough for any sustainable economic growth. Prolonged retrenching will actually stifle economic growth, thus, we need to see a quick improvement in employment. An improvement in employment and a decrease in unemployment rates will increase consumers’ confidence and will encourage spending.

This is a prime opportunity for the American government to help. The government needs to create new jobs and subsidize key sectors in order to change the present economic doldrums. Aside from strengthening the economy, which is a good thing, such a move would increase American's faith in their government and their financial futures.

—Wesley Palmer, MBA
http://www.wezpa.com

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