Following the previous fiscal year, many Americans are becoming more nervous about unemployment in the United States in the next financial quarter and continue to lose confidence in the economy. Many Americans are fearful that they will either become jobless or will be unable to find employment in the near future, causing many to decrease frivolous spending in preparation; especially in real estate and automotive markets.
The Conference Board finds that consumers are reporting that their current economic status appears to be strengthening, but many still remain unsure of their economic future. The alarming factor is this short term increase in job creation and production will not continue into the next fiscal year. That will encourage many Americans to cut down on spending. This month, many Americans stated that, they are concerned that the jobs are becoming less “plentiful” than in September; which actually reinforce their fear of job loss and unemployment.
As reported by the Chicago Tribune: “The decline likely reflects the results of two consecutive jobs reports. Employers added just 142,000 jobs in September and 136,000 jobs in August, after routinely chalking up monthly net jobs gains in excess of 200,000,” (Chicago Tribute, 2015), following the decrease in “consumer confidence,” falling to 97.6 from 102.6 in September of 2015. Many US consumers seem to believe that the increase in job creation in the previous quarter will plateau or discontinue into the next fiscal year. consumer
Following a decrease in production in the United States, many consumers in the U.S. are now feeling more pressure to support the global economy, with increasing global product and consumption. The consumer is also being pressured by a job market that is not expected to improve in the near future. Also the expectation is for a continuing trend of decreased individual spending and a decrease in production, this could potentially weaken the US dollar and US economy.
Many foreign economies are feeling a similar strain, causing many of their citizens to decrease spending. China, for example has begun to experience both a slowing economy and decreasing consumption. Decreasing the amount of exports and attempting to salvage what can be saved in the energy sector. Influencing China to decrease its interest rates and cut prices of oil, coal and various resources, resulting in lower prices for US consumers.
These economic pressures over the previous fiscal year have also caused the price of oil decrease globally. The price for a barrel of oil has been cut to $44 (USD) per barrel causing a decrease in profit in countries where it is drilled. This price decrease is causing a negative impact on the Brazilian and Russian economies as well as pushing for less consumption. That is ultimately leading them to further dependency on US imports and consumption.
The weakening economy across the globe is in turn strengthening the US economy. By increasing the strength of US dollar and the price of US exports, while at the same time increasing layoffs in the US energy sector, and slowing the production of drills and oil equipment in the United States, preventing the US from expanding its oil market and preventing growth in the global economy.
Source: Chicago Tribune
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