Two reports released last week cast more doom and gloom on worsening national and statewide economic situations.
Nationwide unemployment hit at a 14-year high in October, and the majority of Arizona small-business owners are pessimistic about the economy, according to two reports released Friday.
The U.S. economy lost about 240,000 jobs in October, and unemployment rose to 6.5 percent, up from 6.1 percent in September, according to the U.S. Department of Labor.
The same day that report was released, public-opinion research firm O’Neil Associates reported that 25 percent of Arizona small-business owners rate the economy as poor, while 56 percent rate it as fair.
None said the economy is excellent, and only 19 percent rated the economy as good, according to the O’Neil report.
“Just about every single hard economic indicator is negative,” said Michael O’Neil, the poll’s director.
The Arizona small-business owners viewed the state’s economy slightly more positively than the national economy, but it looks as though this difference will become insignificant, according to the report.
Small businesses are a good economic indicator, O’Neil said.
“Small businesses will often feel [economic conditions] more quickly,” he said. “There’s greater sensitivity in many respects.”
Tim James, an economics professor in the W.P. Carey School of Business, said consumer confidence in the economy is a major contributor to job losses.
Reading and hearing every day about bad economic news makes people less likely to spend money, he said.
“What we’re really seeing is people … curtailing spending,” he said. “We’re really in a downward spiral.”
Much of the market is psychological, with people making decisions based on their perceptions, so this can be a vicious cycle, James said.
Nevertheless, the record unemployment numbers would likely have been worse had President Bush not pushed a stimulus package this year that gave taxpayers rebate checks, James said.
Those checks had the effect of increasing purchasing and lessening the effect of a host of negative economic factors, he said.
James said he recommends college graduates apply for more jobs than they usually would in a tough job market.
By 2011 or 2012, college grads should have an easier time finding work, he said.
“The graduate job market will look healthier,” he said.
Barack Obama’s election win may also have a somewhat positive effect on the economy because the president-elect could boost consumer confidence, James said.
“Every new administration gets a kind of honeymoon period,” he said. “I have a feeling that Obama’s honeymoon period is going to be a little bit longer and a little bit stronger.”
Reach the reporter at matt.culbertson@asu.edu.
