The US economy lost 263,000 jobs in September, which was more than had been expected. The jobless rate rose to a fresh 26-year high of 9.8% from August's figure of 9.7%.There was more bad news from the Labor Department, which revised its figures for July and August to show 13,000 more jobs lost than previously reported. Since the start of the recession in December 2007, the number of people out of work has risen by 7.6 million to 15.1 million.
So it seems that the US govt is trying artificial ways to uplift the Economic picture. A false image is being portrayed by US economy as analyzing the data it reveals. In other words creating another bubble.
If we look at the consumer reports declared last time by US we find that Spending by American consumers jumped 1.3 percent in August, the Commerce Department reported Thursday. The increase was the highest in eight years. Consumer spending rose 0.9% for the month on an inflation-adjusted basis. In the past year, real consumer spending has gone up 0.3%.So if the unemployment is 26-year high of 9.8% from August's figure of 9.7% then from where does the consumers get money to purchase which results to High consumption data declarations. So next time we will get unemployment hitting the 10% danger level.
It also reveals that less or no manufacturing is happening in US which resulting to less job creation and higher unemployment rate. The number of new applicants for state unemployment benefits may have risen. In September, the new orders index stayed positive, but dropped from 64.9 to 60.8. Production fell from 61.9 to 55.7, indicating growth at a slower pace than the previous month. The U.S. ISM manufacturing index surprised to the downside, with a fall to 52.6 in September from 52.9 the month before.
Another feather to the bad news is the U.S. consumer bankruptcies rose past 1 million through the first nine months of the year, the highest since 2005. If jobs have been created then the rate of default by cosumers to pay their debt should also get reduced.Unemployment will grow more in the coming days and the recovery will be very slow. Recession will continue for a longer time. Consumer’s defaults will increase like anything in tandem with higher unemployment. This will create pressure on the Economy resulting more write offs and Rebalancing the Balance Sheets of the US companies. And the US banking have to swallow the huge building up unemployment benefits a well as Defaults.
Some economists have warned about the possibility of a "double-dip recession," with economic contraction following the current recovery. US is trying to use media and other sources to prove to the World Economy that they are coming out of recession much faster. Since two data’ are opposite to each other one cannot accept this prove.