Record High Unemployment
Hang on to your job and your credit. Unemployment is at a record high. July brought about higher numbers than June for unemployment as businesses cut more jobs from their payrolls. June alone had a loss of over 460,000 jobs while May had a loss of about 360,000.
Unemployment hit a 26 year high and in 2008 only 3.1 million jobs were lost. Now 2009 brings a job loss of over 3.4 million. Job loss is not the only issue, the hourly work week fell to 33 hours. This is lower than the record lows in 1964.
Employers cut the weekly hours, but the hourly wages were not changed. The shorter week reduced the average pay check by about 3%. Those who have been seeking employment have become frustrated and it is estimated that some 16% have stopped looking for work.
The unemployment rate counts those who are working part time jobs. Consumers who have not worked in six months or more are running out of unemployment benefits. They joined the more than 4 billion who have been out of unemployment benefits.
The concern is that we don't want to set a goal of less problems or lower numbers for this recession, we must strive to do what is necessary to fix this problem. We need for the billions of dollars for the Stimlus Package passed by Congress, to have an impact on the labor market fast.
It is predicted that unemployment may rise to 10% by the end of the year, and there may not be a quick turnaround in hiring or unemployment. As unemployment grows so do the defaults in the credit industry. Some consumers have not been able to pay loans and credit card balances due to job losses.
For the economy to improve, consumers must start spending money. Those who have full time jobs are proceeding with care and are not spending money. Business may be wanting to see a more stable economy before they start spend more money.
Recently, the Labor Department reported a that there was a decrease in workers filing a jobless claim. The number fell from 630,000 to 614,000. When consumers are hanging on to their money instead of spending money, the economy will continue to be sluggish.
With the ongoing credit crisis, unemployment and other mounting debt concerns, many consumers are thinking about cancelling their credit card accounts to avoid the temptation of using them. But now; more than ever, consumers should hang on to their unsecured lines of credit. Not only does doing so provide an emergency cash supply, but closing accounts could actually harm your credit score.
Review other tips and advice to help you during these tough times:
Loans for unemployed people
Unemployment and Credit Crisis
Unemployment Tips
Cancelling Credit Cards Causes Bad Credit
Close Credit Card Account
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