Weak Job Market, Low Consumer Spending Slow Down Economic Recovery
Analysts on Friday said that there are still no signs of fast economic recovery in the US as weak spending habits by the consumers still looms, preventing small and medium scale businesses to continue full operations due uncertainties in the market mood.
A new study released on Friday showed that weak job market, low consumer spending will most likely slow down the process of recovery in the US as consumers’ sentiments remained a major hurdle to businesses to go on full operations.
MFR Inc. Chief U.S. economist Joshua Shapiro said that most of the index indicating economic turnaround is just around the corner as major manufacturing business began to see increase in sales in the past few months.
However, Shapiro said that the sudden rise in the number of first-time claims for unemployment benefits proved that most of the Americans who earlier lost their jobs to the recession are still having a hard time looking for a new job.
He added that the recovery process would be “slow and sluggish” as most Americans may not benefit to the economic growth due to job scarcity, adding that this factors is what hampering consumers from spending which in turn will affect business sales.
Analysts have earlier projected two to three percent growth in the economy in the second half of 2009 as more and more businesses begin to replace sold-out stocks.
However, majority of them also said that it will continue at its slow pace until 2010 due to low spending.
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