News & Resources

Strengthening jobs market could fuel consumer spending

Oct 22, 2013 Philip Burgess

With the employment situation showing signs of improvement, consumers may begin to feel more secure in their current positions - potentially boosting consumer spending in the near future.

As a result, short term lending might be increasingly utilized in the beginning of the year as the risk of financial troubles increases. This type of loan can help ensure that people don't fall short on their bills if unexpected expenses arise.

The recent decline in first-time applications for unemployment benefits is one of the factors driving the jobs market momentum. Claims decreased by 15,000 applications to 358,000 in the week ending October 12, according to the U.S. Department of Labor. The drop may have been greater if not for the government shutdown.

"It's still abnormally high because of the shutdown, and it's still California," Yelena Shulyatyeva, U.S. economist at BNP Paribas, told Bloomberg. "The level of claims overall, excluding the special factors, has declined to a healthy, normal kind of level, but that does [not] necessarily mean that payrolls growth will accelerate from now on."

Another positive sign of momentum was the 176,000 jobs the private sector added in September, according to the ADP National Employment Report. Small businesses created the most positions at 74,000, followed by large- and medium-businesses. The only industry with a decline in the number of jobs was financial activities.

When job security improves, consumers may spend more money. But that doesn't mean they are immune to financial troubles - especially during the holidays. Should an unexpected expense arise, Americans may fall short on monthly essentials. Short term lending can ensure this doesn't happen by providing funds fast - helping people avoid late fees and penalties.