US Unemployment Rise

US economy is getting stabilized and has improved in the pace of economic contraction when compared to economy during mid 2008. But there still exist some sort of uncertainty because of the rising unemployment and tight credit conditions. According to the recent news, labor department has said that the number of people getting unemployed is raising more than expected. Unemployment is supposed to rise to 9.6% in the coming months. It is also seen that about 51% of the corporate chiefs are going to reduce the capital spending and about 49% is going to cut the jobs. All these can very badly affect currently achieved pace in the recovery. 

It is found that gross domestic product is now facing an annualized decline of 5.5% from the months of January to march which is better compared to that of the preliminary reports which was 5.7%. The decline in GDP by 5.5% in Q1 2009 is mostly contributed due to the decrease in the business inventory. Most of the economists believe that the pace of downturn is about 2% currently. Investors are also finding a hope with the low pace of recession. It is seen that Dow Jones Industrial average has risen to 2.1% and there is also ascend in other gauges by 2%.  The standard & Poor’s500 Index has recently increased to 34% from the lowest hit it had during the March this year. Most of the businesses and investors are now anxious about the recovery from December 2007.

It is noticed that there is only a slight improvement in the rise of home sales and that too is below the expected pace. Reports say that there is a rise in the initial claims for jobless benefits by 15000 in the seasonally adjusted 627000.  But a drop to 600,000 was predicted by the economists. But most of them still expect that the number of the initial unemployment insurance claims will be lowered in the coming months. Even though Wall Street is having a little contentment with the current decline in the economic slump, the situations of the families are still pitiable. The rising unemployment, descend in family wealth and financial misery are posing serious threat to the families. In order to raise the economic security and living standards there needs to have public investments in health care, energy independence, and public education. Only with these, there can be increase in the job opportunities and acceleration in the productivity.