Despite Job Losses, Americans are Spending More

Unemployment, job losses and layoffs are some of today’s major concerns not only in America but across the whole world. But a deeper look on Americans’ spending trend revealed some strange discovery – they are spending more money during this difficult time.

In fact, based on the figure released by the US Commerce Department, the consumer spending rose at its fastest speed in almost eight years, increasing by 1.3% in last month statistic.

Looking from the positive angle, the vibrant spending may help to boost the national economy and speed up the economic recovery (the fact is, the consumer spending makes up more than 30% of US economic activity), but then again, the US median income has spectacularly failed to keep up with the increase in spending. To make matter worse, the savings rate also slumped.

All these are happening at the time where the job losses in the country appear to be escalating. Last week, the number of Americans filing their unemployment benefits for the first time increased after fluctuating around the same figure for over a month. In September, the US unemployment rate hit 9.7%, its highest rate in decades and is looking well on its way to reach the dreadful mark of 10% as predicted by many analysts.

More consumers were found to be making late payments on loans and credit cards, with the risk of bankruptcy appears to be not too distant away.

Perhaps, it’s time to wake up.

US Unemployment Goes a Tad Higher

The US Unemployment figure now has reached a new record high after reaching 9.8% in September, an increase of 0.1% from the previous month.

The figure is well on its path to hitting the dreaded figure of 10%, a percentage many analysts predict to be reached by the end of the year. Certainly not good news for the President Barrack Obama who is yet to recover from Chicago’s failure to hold the Olympics and reviving the country’s healthcare reform.

Business owners and corporations remain conscious about their financial future and many are still reluctant to open up jobs and embark on hiring exercises. A big chunk of them are more interested to reduce company’s expenditure by means of salary cut, imposing plant shut downs, freezing bonus payout and so on. As far as company’s workforce increase goes, don’t mention it. Even some of the state government had to make do with shedding workforce.

Employers cut 263,000 jobs in August, marking a 21 consecutive monthly job decline, with the number higher than August (201,000). The biggest job losses are seen in 4 sectors – manufacturing, construction, retail and government. Surely, the influx of new candidates trying to reenter the job market will not make the situation any easier. There will be more applicants applying for one single job and expect a fierce competition regardless of your experience, academic credentials and achievements.

Negative job growth is predicted to last until mid of year 2010, and even after it goes on the positive scale, the growth will be at snail’s pace.

Rebounding From a Layoff

Getting laid off can be a terrible experience that not only negatively impacts your finances, but also can chip away at your confidence and self-esteem.

The US unemployment rate currently stands close to 10 percent, the highest unemployment rate in decades. Millions of Americans are going through the process of losing a job and having to figure out what to do next.

For many of us, especially those of us who have spent many years training for a specific career or decades at one place of employment, our jobs are very much a part of our identities and ideas of self worth. When we lose that job or career, it’s perfectly natural and expected to experience feelings of grief, loss, helplessness and worthlessness. Financial anxieties caused by the loss of one’s livelihood can compound these feelings and actually make it harder to regain the verve and self-confidence needed to move on and find a new career or other employment.

Your job is not the totality of your existence, however, and the sooner you realize and accept this, the sooner you’ll be able to move on and find other work that you may even enjoy more than your former career. Looking back and pining over the job you lost won’t get it back, and more importantly, it won’t pay the bills, either.

When you’re laid off from a job, the first thing you need to do is take stock of your financial situation. Sit down and figure out your monthly bills and expenses. (Remember to take into account the cost of health insurance that you’ll now have to supply for yourself.) Also figure out how much, if any severance you’ll be getting, how much in savings that you have and how long your unemployment benefits will last.

Once you’ve sorted your finances, you should start weighing your options. Is it likely that your old job will hire you back? Do you want your old job back, having been laid off once already? With your current skill set, can you find a job with salary and benefits comparable to the one you lost? Is moving to a new area for a job an option? Would you like to go back to school to pursue a new career path?

A layoff can be a great opportunity to retrain for a new, better-paying career. Many states have grant programs to help workers displaced by a layoff pay for retraining. The best way to find out about these opportunities is to get in contact with the financial aid office of your local community college or four-year university.

Another option could be to start your own business. During recessions, when layoffs abound, many people take losing their job as the push they need to strike out on their own and start their own business. There’s a variety of small business loans and grants available to first time business owners from the government.

If you decide to re-enter the work force right away, use your social network to your advantage and also take the time to give your resume a facelift. A good resume is the key to finding quality employment as it is often your prospective employer’s first look at you.

A layoff can lay you flat on the canvas, but with a little grit and determination you can pull yourself up again and find new and better employment.

UK Unemployment Hits 14-Year High

The UK unemployment has risen up to 2.47 million between May to July this year, marking the highest unemployment rate since year 1995, signaling long years of agonizing wait before the full recovery.

It also echoes the sentiment of Mervyn King, the top guy who governs the Bank of England, who had earlier warned that ‘the economic recovery would be long and protracted’.

There can be some sigh of relief in terms of redundancies – the total redundancies were 246,000 in three months to July, compared to the 302,000 peak figure recorded in April. That’s close to 20% reduction.

Britain’s close ally, United States also recently hit a record jobless rate of 9.7%, and is facing tougher challenges compared to other European counterparts, with the average unemployment in the European continent fluctuating around 9%. UK unemployment rate is now 7.9%, and while the number is rather significantly lower than the US and the European average, it does not translate to any better condition.

As the days go by, the claims for job seeker’s allowance continues to increase steadily, elevating the number of those relying on the government welfare – something a developed country would not be particularly proud of. Analysts expect more people to go jobless, with the number of unemployment to exceed 3 million figure by year end.

As what the general secretary of the Trade Union Congress, Brendan Barber put it rightly, “There seems to be no sign of recovery here.”