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Stabilizing jobs market could boost consumer spending

Nov 13, 2013 Quinn Thomas

Since the financial crisis, the jobs market has been up and down, but recent data shows it is headed in the right direction. With improved stability, consumers may be more comfortable increasing outlays this holiday season, which could lead to higher risk of financial troubles, especially if an unexpected expense arises.

For example, a person's car breaking down could be crippling after major holiday purchases. Fortunately, short term lending is available to provide funds quickly so people don't have to fall short on any essentials and face late fees and penalties.

The most recent sign that the employment situation is stabilizing was October's jobs report, which revealed non-farm payrolls increased by 204,000 positions, according to the U.S. Department of Labor. The median forecast of economists surveyed by Bloomberg called for an increase of 120,000 jobs.

"The economy isn't as weak as people seem to think it is in the fourth quarter," Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc, told Bloomberg. "The job market is in a phase of grinding improvement."

Another sign the jobs market is improving is fewer layoffs across U.S. companies. According to the Department of Labor, first-time applications for unemployment benefits decreased by 9,000 claims to 336,000 in the week ending Nov. 2. The four-week moving average dropped by 9,250 applications to 357,500.

"We're still seeing a very low trend of job destruction, but this is just one side of the equation," Scott Brown, chief economist at Raymond James & Associates Inc, told Bloomberg.

Brown added that additional job creation is needed before the employment situation really begins to improve, which came in October. Future gains should help bring down the unemployment rate and boost consumer confidence.