According to a Labour Department report, 429,000 Americans filed for first-time unemployment benefits that week – 14,000 more than an earlier prediction done by economists for Reuters.
The report came a day after Ben Bernanke and the Federal Reserve issued a statement – citing problems in the housing market, excess private sector debt and weaknesses in the financial sector as being more serious than previously expected. The labour market was another area for concern as the economy failed to recover fast enough to combat inflation and unemployment.
Accordingly, the Bloomberg Consumer Comfort Index also fell from minus 44 to minus 44.9 in the last week, as Americans grew even more concerned about the economy.
Similarly, EconomyWatch.com’s Real-Time Consumer Confidence Index saw a dip in American confidence in the last month from 570 to 547 – a 4.7 percent decrease.
The US is the second-lowest ranked G7 nation on the EconomyWatch Consumer Confidence Index – coming in just ahead of Italy, and behind the UK and Japan.
A Bloomberg poll also showed that 44 percent of Americans believed that the economy is currently worse off under President Barack Obama than it was when George W. Bush was in office.
There has been a growing sense of gloom in the US with new reports suggesting that economic conditions are likely to worsen before getting any better.
“Things are still going to be weak for a while,” said Scott Brown, chief economist at Raymond James & Associates to the New York Times.
Asha Bangalore, an economist at Northern Trust, said, “my conclusion is that the problem in the labour force is very uneven...We have the Fed doing nothing (in terms of raising rates) through 2012. The criteria for another round of quantitative easing however will be different. We don’t have a deflation threat anymore. The Fed is going to weigh the cost and benefit of another round of quantitative easing.”
Story from New York Times
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