Intersecting Minds: Education, Business and Technology at the North Carolina State Jenkins Graduate School of Management

More Fun Economic News | January 9, 2009

According to CNN, the biggest problem is no longer the housing market or the credit crunch, but the ballooning number of unemployed workers:

Rising unemployment will probably make banks even less willing to lend and also lead to increased defaults on a large range of existing loans.

And with more consumers losing, or worried about losing, their jobs, that should lead to a further pullback in spending. In turn, that will make it tougher for companies to increase their profits, which could lead to even more stock market losses.

If all that weren’t bad enough, economists worry that that this will put more pressure on employers to lay off even more workers — prompting the proverbial vicious circle that can make it so hard to get out of a bad economic downturn.

Ugh.

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Posted in Economy
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