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Hiring Confidence Hasn't Been Boosted by Signs of Economic Recovery

Source: CNN

Posted on 25 Nov 2009

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Despite some signs that the economy is on the mend, a lack of confidence from consumers and companies alike may hamper job growth during the next few months, economists say.

Unlike this point last year, there are some indicators for optimism about the U.S. economy. The market seems to be on a rebound, with stock prices growing steadily since March. Meanwhile, the U.S. Gross Domestic Product, a broad indicator of the economy's strength, grew during the third quarter. It was the largest such growth since the summer of 2007.

However, the unemployment rate is staggering. The national rate hit 10.2 percent last month, the first time it has been double digits in more than 25 years.

The jobless rate increased in 29 states and the District of Columbia in October, according to a recent Labor Department survey. Thirteen states reported an unemployment rate above the current national rate.

There is also concern that the GDP growth is largely the result of the economic stimulus implemented by the federal government and other government initiatives like the "Cash for Clunkers" program for automobiles.

Ben Bernanke, the Federal Reserve Chairman, said recently that economic conditions were better than they were a year ago, and a modest recovery was on the horizon.

Sounding a note of caution, he said: "Some important headwinds -- in particular, constrained bank lending and a weak job market -- will likely prevent the expansion from being as robust as we would hope."

Polls suggest many Americans are not confident about the economy.

"Some economic indicators may suggest that the economy has turned the corner -- but try telling that to the American people," said Keating Holland, CNN's polling director.

More than eight in 10 Americans say that economic conditions are in poor shape, according to a recent CNN/Opinion Research Corp. poll. Of that number, 43 percent described the conditions as "very poor."