We are officially in the land of reading between the lines to only find good news. The number of newly laid-off workers dropped unexpectedly last week, but the number of people continuing to get their unemployment money rose to nearly 6.3 million, setting a record high for the 13th straight week.
631,000 people filed for unemployment last week... down from the prior week's 645,000. But this is only a 14,000 job difference. One company can make up that difference in one day. GM is set to layoff another 21,000 workers for example.
Furthermore, the current number of people receiving unimployment jumped to 6.27 million, the highest on records since 1967 and steeper than economists expected. Yet the stock market is still up because we somehow found good news here?
I would say the only good news is that the savings rate is holding steady, even slightly increasing. The personal savings rate rose to 4.2 percent from 4 percent in February. It was at 4.4 percent back in January... that's the first time in more than ten years the rate has been above 4 percent for three straight months.
But economists look at the higher savings rate as a worrisome sign. That's a very short term way to look at things. There is no quick fix to the problem and Americans need to start saving, reduce their debt, and feel like their house won't lose more value before we are truly on the road to recovery.
Households have been cutting back on spending and boosting savings during the recession, worried that they need to replenish depleted nest eggs as job cuts mount and investment values plunge.
Consumer spending accounts for 70 percent of total economic activity... so it's understandable that it's so closely watched, but the savings rate increasing is a good thing for the long term. Maybe things will get worse before they get better and the road to recovery will take longer, but at least we'll be fundamentally and financially sound if we continue to save... otherwise we'll be dealing with another "economic crisis" in 5 to 10 years.
Read more here.
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