while we enjoy our weekend today, let us not forget the almost 10% of folks in the US who are having ” perpetual ” weekends.
Yes they are unemployed.
Noting from the chart above, the US’s unemployment rate has been increasing since early 2007 and has hit a accelerated pace since the crisis of 2008.
The unemployment rate is currently at the 10%’s doorstep.
Domestic consumption is very important in an economy.
With decreased consumer spending due to the unemployment rate, there may be a “drag” effect on any attempts to boost the economy.
With regards to investors from other countries, an ailing economy and employment situation will most likely not be viewed upon with favor.
Presuming that overseas investors reduce their holdings in the US due to the poor economic outlook, this may lessen the demand for the US currency and hence the USD weakens.
In fact, if you were to view a chart of the US Dollar index, you will notice that the US dollar has been weakening these years with the exception of the risk aversion theme of the 2008 crisis.
As of now, choose any ten people of working age in the US and we potentially have one who is currently unemployed.
This alarming unemployment rate may potentially be a force to be reckoned with in time to come.