Additionally, the US labor market is starting to show signs of fragility, worrying economists and investors at the same time. This interpretation is bolstered by recent data indicating that unemployment claims are set to spike as the economy starts to exhibit severe and growing strains. Yet analysts are cautioned that the worst economic signs are most certainly yet to come. They point to a sobering picture for job seekers, suggesting a challenging market ahead.
The unprecedented economy remains weak Yes, there was a small upward revision from -0.3% to -0.2%, but it’s too grim to celebrate that. This bite, though small, contributes to the overall picture that growth is coming to a standstill. Personal consumption was downgraded from 1.7% to 1.2%. This unprecedented decrease in consumer spending threatens to drive the economy even further into contraction.
To compound these problems, first-time jobless claims increased to 240,000, up from 226,000 last week. People applying for unemployment benefits keep increasing. This trend exacerbates fears that employment prospects are contracting. Continuing claims grew last week as well, a sign that workers are now experiencing longer spells without employment.
As our nation’s labor experts have pointed out, today’s labor market is more difficult for job seekers, taking them longer to find a job. With jobs becoming less plentiful and cracks beginning to appear in the labor sector, many are left questioning the viability of the job market moving forward. There’s a widespread perception that today’s economic landscape just can’t support the kind of robust job growth we need. This troubling development would further exacerbate high unemployment.
The major U.S. stock indices’ steep slides have kept pace with, and often led, these economic worries. That positive sentiment is a shadow of the rally that launched all upside trading sessions recently, as is evident with US equity futures currently up just 0.7%. Even the recent bounce in the US dollar has run out of steam. Currently, the dollar index is just below 100.00 and falling.
Today, economists are watching the labor market like hawks. They’re looking to economic indicators to breeze on signs of recovery or further decline. The unemployment rate doesn’t have to spike to historic highs. Public, nonprofit and private sectors alike are still coming to grips with the demands of a souring economy.