Financial News

It's no secret that the recession has had a lasting effect on the entire nation, but some experts believe that for late teens and young adults, in particular, the recession could have scarred them for life. Researchers from UCLA and the International Monetary Fund have recently determined that the recession could have had the same lasting effects as the Great Depression.

The Implications of the Recession

The researchers said there are likely to be some definite implications of the recent recession on the current generation of young Americans. They believe that many will likely take on similar behaviors to those from the Great Depression by becoming conservative spenders and investors. This will come, in part, from the struggles they saw in family and friends as they take time to contemplate the power they will have over their own destiny.

Specific Concerns of Late Teens and Young Adults

The researchers noted that there are a few major concerns that individuals in this age group will likely have in reference to the recession:

• They will likely concern themselves with home values just as they watched their parents do.
• Once they started working, they may constantly concern themselves with getting laid off.
• They may worry about the security of their 401(k) plans.
• Many will probably not want to risk their money in the stock market due to watching their parents lose thousands.

According to recent research from Fidelity Investments, Americans ages 22 to 33 are shifting toward more conservative financial behaviors as well. The experts believe it may take many years for Americans to adopt a liberal attitude toward the economy and finances again.

Have you become a more conservative spender since the recession?

A new report from the Commerce Department on Wednesday showed that compensation earned by U.S. workers rose in November. According to the report, earnings increased by 0.3 percent, which is said to be a sign that labor markets are slowly improving.

Wage and Labor Reports

According to the Commerce Department report, the increases that are shown for wages and salaries are the best since April. And because of these improved numbers, total personal incomes increased by 0.4 percent in November bringing the annual rate to $12.2 trillion. This is said to be the biggest gain since may.

According to the Labor Department, the increases were due to a 0.6 percent increase in hours worked. Income that was earned by small business owners also increased by 1.2 percent. The good news is that these numbers fall in line with the predictions coming from economists.

Some other numbers from the reports are as follows:

• After-tax disposable incomes rose 0.2 percent in November
• Real disposable incomes rose 2.3 percent
• Consumer spending increased 0.5 percent to an annual rate of $10.2 trillion
• Inflation-adjusted real spending increased o.2 percent

What These Numbers Mean to You

While you may not know what all of the figures represent, it's important to pay attention to the increases, which basically mean that not only is income increasing, but spending is good too. In other words, people not only are making more money, but they feel comfortable spending what they have too. It's good to note that the increases are not extreme, but at least they're headed in the right direction.

Earlier in the week, it was determined that increases in these numbers for the quarter may determine whether the Federal reserve would begin raising its rates again. Since there is no official word yet, we'll just have to wait and see what the days will bring.

Have you earned more and/or increased your spending in the past few months?

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