Dark Cloud Over US Economy

Many Americans have come to the conclusion that they may never have a good economy like those glorious days when more jobs were created and activities went on smoothly. A Labor Department report released last week said more people applied for unemployment benefits some few days ago. The number of Americans seeking unemployment benefits rose by 10,000 to a seasonally adjusted 424,000. �That�s above the 375,000 level consistent with sustainable job growth,� the report stated. This means that Ghanaians and other nationals who are planning to relocate to the United States of America to seek greener pastures during this period would find it tough to survive. Interacting with the 2011 Citi Journalistic Excellence Award Winners in New York , USA, an official of Ernst and Young said America needs to create about 150,000 jobs per month to break even but only 50,000 jobs were created in May. The official, who pleaded anonymity, said: �Restoring the job market will take some years.� US has been grappling with an economic downturn since it unleashed its so-called �war on Terror� military campaigns on Afghanistan and Iraq during the tenure of former President George W. Bush. The meltdown has been the worst economic crisis to hit America since the Great Depression of the 1930s. The accumulation of debt is affecting the economy. US Today Newspaper reported last week that the country�s internal debt hit $62 trillion. Results from the Consumer Confidence survey conducted by the Consumer Conference Board have also been choppy in recent months, rising in April but falling in March. The number of people expecting jobs to grow in the next six months declined, and the number of people expecting fewer jobs during the same period increased. More household incomes are shrinking as it is becoming difficult to find job in US. The Consumer index revealed that Americans do not believe that the economy will keep improving. The monthly survey saw the Consumer Confidence Index fell to 60.8 from a revised 66 in April, a sign that high fuel prices, a choppy job outlook and a moribund housing market are having untold hardship on the people. Retail gasoline prices peaked at a national average of about $3.98 a gallon ($1.05 a liter) on May 5 2011, according to Wright Express and Oil Price Information Service. The index was the lowest reading since November. �Consumers are considerably more apprehensive about future business and labour market conditions as well as their income prospects,� said Lynn Franco, director of The Conference Board Consumer Research Center. She said fears over inflation, which eased in April, picked up again in May. The index is still far from the reading 90 that indicates a healthy economy. It hasn�t approached that level since the recession began in December 2007. Economists monitor confidence because consumer spending, including big-ticket items such as housing and health care, accounts for about 70 percent of US economic activity and is critical for a strong rebound. The consumer confidence survey ran from May 1-18. The real estate market also remains depressed. Home prices fell nationwide for the eighth straight month, according to the Standard & Poor�s index released recently. Home prices in major areas have reached their lowest level since the US housing bubble burst in 2006, stymied by foreclosures, a surplus of unsold homes and continued reluctance of Americans to buy homes. Reports say home prices dropped by 4.3 per cent in the first half of 2011 after falling from 3.6 per cent in the fourth quarter of last year. The President of Goldman Sach�s Global Markets Institute, an American-based firm, which provides research and high-level advisory services to investors, regulators and policy makers globally, blamed the low economic growth recorded by the economy on crude oil price hike, bad weather condition, which prevented economic activities, and the current tragedy that hit Japan. �The US automobile industry uses components from Japan so the disaster had bad implications on the US supply chain,� Ms Abby Joseph Cohen told this paper in an interview in New York this week. She was disappointed that the unemployment rate in the country still hovers at 9.1 per cent but expressed hope that the economy will record three per cent growth this year. �It is not all that gloomy in America yet we have seen improvement in some areas of the economy such as the export sector, banking and private investment equity,� the President of Goldman Sach�s Global Markets Institute stated.