Less worried about layoffs, jobholders spend more

[Omaha Steve]

Source: AP

By PAUL WISEMAN

WASHINGTON (AP) - A steady decline in layoffs is giving the vast majority of adults who have jobs the confidence to spend more freely and help energize the economy. They no longer worry so much about losing their jobs.

Their renewed confidence has boosted retail sales - just what's needed to spark what economists call a "virtuous cycle": Higher consumer spending raises company profits, which spurs hiring, which fuels more spending and growth.

Consumer spending is critical because it powers about 70 percent of the economy. It rose for five straight months through November, kicking off the strongest holiday shopping season since 2006. Many shoppers are showing enough confidence to splurge on new cars: Auto sales rebounded 11 percent in 2010, the first increase since 2005.

"The strongest showing for consumers since the peak years of the last expansion signals that the broader economy is near a threshold of self-sustaining growth," analysts at Citi Investment Research & Analysis wrote last week.

Read more: http://apnews.excite.com/article/20110110/D9KLCRN80.html

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FULL story at link.

[xchrom]

1. a different angle to look at that

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8249181/Deepening-crisis-traps-Americas-have-nots.html

There is a telling detail in the US retail chain store data for December. Stephen Lewis from Monument Securities points out that luxury outlets saw an 8.1pc rise from a year ago, but discount stores catering to America’s poorer half rose just 1.2pc.

[fasttense]

2. See, the American economy doesn't need all those long term unemployed people

to have jobs for America to recovery from this Great Recession. All we need are the very rich to get richer and the remaining middle class to think they will keep their jobs.

All those who have been unemployed for years are just not that integral to our society. All you folks who have gone bankrupt over medical bills, all you folks who have had your houses foreclosed on, all of you who have been out of work for so long that you have stopped counting the months, we just aren't that important to this huge engine called the American economy. :sarcasm: