As Unemployment Rate Rises, Consumer Confidence is Dropping

Sept. 28, 2010 - PRLog -- As the number of unemployed workers continues to rise, all Americans –unemployed or not – are starting to feel even worse about the economy.  According to a report released on Tuesday, Consumer Confidence is at 48.5 – its lowest level since February.

The Consumer Confidence Index is released every month by the Conference Board.  It is considered an indication of how Americans feel about the state of the economy.  The Consumer Confidence Index is based on a random survey that is mailed to 5,000 households from September 1st to September 21st.  The surveys showed that consumers' fears about jobs and unemployment has actually gotten worse.

Economists keep a careful eye on Consumer Confidence, because it drives spending, and, ultimately, economic recovery.  Experts say that Consumer Confidence is responsible for about 70% of U.S. economic activity, so the lower it is, the less money Americans are spending.

In August, Consumer Confidence was at 53.2.  With news that the unemployment rate had gone up again, though, experts were predicting Consumer Confidence to drop slightly in September.  However, Consumer Confidence fell much lower than even the experts had anticipated.

"Overall, consumers' confidence in the state of the economy remains quite grim," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. "And, with so few expecting conditions to improve in the near term, the pace of economic growth is not likely to pick up in the coming months."

That is bad news for millions of unemployed workers, who will likely need to wait for an economic rebound before getting new jobs.  And, along with being unemployed, millions of Americans are also living in poverty.  A report released nearly two weeks ago said that 1 out of every 7 Americans is living below the poverty line.  With consumer spending dropping, those grim numbers are not expected to improve anytime soon.

Economists have said that the recession is officially over, but that is of little consolation to millions of unemployed workers.  According to the Labor Department, the number of people applying for unemployment benefits went up again last week.

For more on this story – along with all of the other unemployment news of the day – log onto http://unemployment.info.

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