The U.S. economy is faltering. Consumer confidence is shaky and business uncertainty is rife, and the two create an ugly downward spiral. Worried about tomorrow's bottom line, companies refuse to hire. Fearful of being unemployed, consumers are tightening their belts. The result is a stagnant economy that threatens to bring about a "double-dip" recession that could drag the rest of the global economy down with it.
The U.S. consumer enjoys living beyond his or her means — and that same profligacy provides demand that keeps production lines humming around the world.
Despite the government's injection of hundreds of billions of dollars to goose the U.S. economy, demand is slowing. The most recent employment report, released last week, shows the third consecutive week of rising first-time jobless claims. According to the U.S. Labor Department, those claims rose 12,000 to 500,000. That is still below the peak recorded in March 2009, but the incremental increase is a sign that employers are again laying off workers. The national unemployment rate remains at 9.5 percent; The rate's not rising suggests that some workers are again dropping out of the job hunt — another indicator of an economy in trouble.