White House Expects Job Growth and Personal Savings Rates to Improve

One of the biggest factors, which have been affecting consumers during the recession, has been: high amounts of debt. This is occurring in part, due to the negative savings rate that many Americans had in the years before the current financial crisis begun. However, it appears as if the economy could be showing the first signs of stability. Recent evidence of this can be seen by looking at a report released from: the White House Council of Economic Advisors. Where, the White House is predicting that the economy will begin adding a consistent 95,000 jobs per month. As far as the overall unemployment rate is concerned, they expect this number to remain within the 10% range.  This is because the recession has changed the spending habits of consumers, who are spending far less than they use to and saving more. As a result, the overall pace of the economic recovery could be slower, as there will be less demand for large big ticket items such as: automobiles.

What all of this shows; is that the current recession is following the typical pattern of severe recessions and depressions. Meaning, that once the economy stabilizes there will be a period of job creation. Yet, the unemployment rate will remain high because the recession has changed the psychology of the consumer. That being said, after a period of stabilization, you will begin to see consumer spending pick up as confidence increases. This means that any kind of recovery might not be realized until 2011 or 2012.