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Record Breaking Bankruptcy Numbers Accompany Economic Growth

Is the economy turning around? Well, we’ve heard all the experts say that it’s finally on the right track, but what does that really mean to American consumers struggling with credit card debt and facing a 10% unemployment rate?

Strictly looking at the numbers, it does seem like some things are getting better, while some, like the job market, are continuing to struggle. According to Time, consumer spending went up 6.6% over the summer, and Gross Domestic Product grew 7.2%. These are amazing numbers, taken completely alone. However, American’s lost over 165,000 jobs during that same time and the unemployment rate isn’t improving.

While the national numbers like spending and domestic product are on the rise, it’s the local numbers that matter to consumers. I read a quote today from Vice President Biden, which he got from his grandfather, that summed it all up:

“When the guy in Minooka’s out of work, it’s an economic slowdown. When your brother-in-law’s out of work, it’s a recession. When you’re out of work, it’s a depression.”

He’s so right, and with the unemployment rate still so high, consumer confidence is going to continue to be low until neighbors and family members find work. The problem there, most experts are saying, is that the job gains will not come as quickly and dramatically as the job losses came, which basically means that we still have a long way to go.

With consumer spending going up slightly, so is the amount consumers are putting on their credit cards. Consumer debt is still extremely high, and, while consumers are learning to budget and pay bills on time better than ever, with the holiday season quickly approaching it’ll be interesting to see where the credit debt numbers go.

As for consumer bankruptcies, while the economy ‘is turning around,’ bankruptcy numbers are sky-rocketing. The latest numbers show that in October bankruptcy numbers rose to 9%, right on target for the highest annual rate in four years.

Experts are saying that the unemployment rate is really starting to take a toll in consumers, causing many of them to go through their savings and retirement funds just to get by. In the end, they’re left with their credit cards, which leads to inevitable credit card debt and eventually bankruptcy. That cycle has hit hard in the past month, and will continue to hit hard through the holiday season.

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