Because here comes the Great Depression II:
People once again spent everything they made and then some last year, pushing the personal savings rate to the lowest level since the Great Depression more than seven decades ago.
The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression.
Update: And joblessness:
WASHINGTON (AP) - The nation's unemployment rate climbed to a four-month high of 4.6 percent as somewhat wary employers added fewer new jobs in January. Wage gains were more modest.
The newest report on the economy, released Friday by the Labor Department, suggested that the jobs market got off to a slower start in 2007 yet still remains in decent shape. The more subdued job growth - 111,000 positions - is consistent with the expectation that growth in the economy as a whole will moderate this year.
The tally of new jobs added last month fell short of economists expectations for a gain of around 150,000 positions. Analysts also had said they anticipated that the overall unemployment rate would have held steady at 4.5 percent, the rate that was registered in December.
"Employers have adopted somewhat of a more cautious approach to hiring as they wonder how much of a slowdown there will be," said Ken Mayland, president of ClearView Economics. Analysts predict the economy will lose some speed in the January-to-March period following an energetic October-to-December quarter.
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