CNN reports Staples, the office supply giant, will be shutting 225 stores in North America to trim their operating costs and fight against weak sales. The Staples store closings will be made by the middle of next year and will include 12% of its stores in North America.
The amount of consumer debts owed by the average United States household is staggering. In fact, it’s estimated that the average credit card debt is currently $15,270 and the average student loan debt is $32,258. This means American consumers owe an estimated$856.9 billion in credit card debt and a little over $1 trillion in student loan debts.
The bankruptcy judge overseeing Detroit’s bankruptcy has decided that retirees, unions and others opposed to Detroit’s financial bankruptcy repayment plan will have their day in Court. Monday U.S. Bankruptcy Judge Steven Rhodes announced the trial to debate Detroit’s bankruptcy repayment plan will be scheduled for mid-June.
CNBC reports that stocks have continued to rally this week, raising the S&P 500 to a record and clearing its 2014 loss, leading some financial experts to state they believe the economy is getting stronger. Both the Dow Jones Industrial Average and the S&P 500 both rose this month. The Dow Jones Industrial Average was up as much as 195 points. The S&P 500 rose to a high of 1,858.70, clearing both the intraday and closing records set on Jan. 15.
Worried about your credit card debt? Read the fine print of your Capital One credit card rules and you might be. For instance, according to their rules, they are allowed to contact you by mail, phone, email or by personal visit. That’s right, if you are delinquent on your credit card bill Capital One has stated they can visit you. But according to a new report by The Los Angeles Times, Capital one has told their customers a personal visit is very rare.
While Target chief financial officer, John Mulligan, continues to apologize for the Target data breach that compromised some 40 million credit cards and the personal information of 70 million customers, the public and government officials continue to discuss new ways to combat credit and debt fraud. Experts suggest the solution might include chip and PIN cards.
Before you get too excited by reports that the January unemployment rate inched down to 6.6 percent, remember, the unemployment rate is not always the best measure of the job market. What we now know is that many Americans have simply dropped out of the workforce and are no longer actively looking for employment.
In fact, according to a new report by CNN, there are an estimated 91 million adult Americans who do not work. This number is 37% of the population, and the highest level on record since 1978. Remember, however, this number can also be a bit deceiving because it also includes stay at home moms, adults enrolled in college and some retirees.
Federal Reserve Chairman believes too many workers are unemployed
But before you think it’s just a few naysayers who are complaining about the unemployment rate, consider, the new Federal Reserve Chairman, Janet Yellen, agrees. Yellen, who was sworn in last week, pointed out that she has continuing concerns about long-term employment, despite what she considers gains since the Great Recession.
“The recovery in the labor market is far from complete,” she said. Yellen is concerned about what has been termed underemployment, which includes workers who are part-time who want to work more hours and those who have been unemployed for more than six months.
How large is the problem? According to a new report released in January, there are an estimated 3.6 million workers who have been unemployed for more than 6 months. Unfortunately, the longer a worker is unemployed, the more difficult it becomes to re-enter the workforce.
The underemployed has also grown, with an estimated 7 million Americans working fewer than 35 hours a week. According to the CNN report, underemployment occurs for a variety of reasons including “slack work, unfavorable business conditions or an inability to find a full-time job.”
What is the Federal Reserve doing about unemployment?
The Federal Reserve has discussed easing their program of buying billions of bonds each month, but they have suggested that the tapering program was contingent on the improvement of the U.S. economy. With the remarks by Yellen, it’s clear she will follow in Bernanke’s footsteps and continue with the program.
What does the Federal Reserve hope to gain? Although many economists have argued the Federal Reserve’s program of quantitative easing will eventually devastate the economy, the Fed believes “that by stimulating more borrowing and spending, lower interest rates can jumpstart the economy.”
The Federal Reserve has lowered their purchases of bonds from $85 billion in bonds per month since September 2012, to $75 billion in January. They will continue to taper to $65 billion in February.
As mentioned above, the Federal Reserve was hoping the unemployment rate would continue to fall, believing the lower employment rate is an indication that more Americans have successfully entered the labor force. But as we know, much of the decline in the unemployment rate over the last three years has come from Americans leaving the labor force entirely, and this is not good for the economy.
According to a new Fitch Ratings reports, personal bankruptcy filings, including Chapter 7 and Chapter 13 bankruptcies, have had four straight years of declines. Personal bankruptcy filings fell an estimated 12% in 2013 (from 145,759, to 1,011,732 from 1,157,491 in 2012) and are expected to drop another 8-10% in 2014. Experts expect the decrease to level off after 2014.
More bad news for the Obama Administration as the Labor Department releases their unemployment report. According to a new USAToday report, “The job market showed another weak gain last month as employers only added 113,000 jobs.” The Labor Department noted that the unemployment rate fell a measly 6.6% from 6.7%. Economist also determined approximately 185,000 jobs were added last month, according to their median forecast.
The Obama administration may argue the U.S. deficits are not so high, but there’s no arguing with the fact that the interest the United States owes on their cumulative debt could be devastating for our country. According to a new report by the Congressional Budget Office, we can expect the U.S. debt to nearly quadruple over the next decade. This means that the U.S. will pay an interest payment of $233 billion this year, or 1.3% as a share of the economy.