Debt relief becoming more elusive as jobs fall away

10.02.09
By Timothy Green

Americans struggling to find some debt relief are finding little relief from the government's latest unemployment figures.

This week, the Bureau of Labor Statistics reported that the nationwide unemployment rate had risen to 9.8 percent, up a fraction from last month's 9.7 percent. This represented a loss of 263,000 jobs for September, which the government said was primarily in industries like construction, manufacturing and retail.

The latest report also noted that there are now 15.1 million unemployed people in the United States, up from 7.6 million at the start of the recession in December 2007. Since then, the unemployment rate has also doubled to the current 9.8 percent level.

If there is one piece of good news in the current employment situation, it may be that the unemployment rate has yet to actually exceed 10 percent, as many economists have predicted will happen before the economy fully recovers.

Elsewhere, a separate government report found that those who did have jobs were earning somewhat more money and were also slightly more inclined to spend more.

According to the Commerce Department, personal income increased 0.2 percent for August, matching identical results from the month of July. Disposable personal income notched a minor improvement, up by 0.1 percent.

Also, consumers were spending somewhat more, with a 1.3 percent increase in August, building on a 0.3 percent increase in July. Americans were also reported to save about 3 percent of their income in August, down from about 4 percent in July. This is an improvement from earlier in the decade, when the savings rate hovered closer to zero.

Even if unemployment may be showing signs of leveling off, people will continue to struggle in the short term with debt relief remaining elusive for many.

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Unemployment is making debt reduction all but impossible for many.