When Bank lending is constrained and employers have little confidence in the economy and the reports that things are getting better a weak job market will always follow. With so many saying that everything but the job market is looking up, why is there so little confidence in the economy and why are employers and banks cautious about taking a chance on lending or hiring?
The weak job market is said by some to be on the rebound and by others to be getting worse. One main reason for this idea that things are getting worse is there is constrained lending from financial institutions who took a big hit in the recession. Arguably that hit came from their own actions and practices, but with Congress, the Fed and the FDIC doing what they can to keep banks and businesses afloat there is little business being done by those institutions.
One thing that could help the weak job market is more lending from banks, but with the amount of defaulted loans that have been seen by banks in the past months few can argue they have reason to be cautious. However, this constrained lending is keeping would-be businesses and companies that survived the recession from hiring workers and therefore making the job market all the weaker.
Companies who have cut back duing the recession and now see how to do business with less workers are not going to hire or open new jobs unless they feel safe in doing so. However, this poses an interesting question as to why employers aren’t hiring when everything but the job market looks to be rising.
If the economy is rolling again why are employers still lacking the confidence to increase their workforce? One reason could be the demand for goods and services is low due to the weak job market leaving many with little or no income to purchase these goods and services, so the lack of confidence in the stability of the economy and the weak job market are stuck in a cycle of self-defeat.
However, the idea of more lending from banks is felt by many to be a way to expand the workforce and help what many to consider to be a weakening job market. Others argue though that the banks have no one to lend to and since they have dealt with so many who were unable to pay back loans, the banks are in no position to lend in a market that is so unsure.
Rather than having to go out and get a bank loan some may be looking to save money buying a car on Craigslist in 2012. There are several makes and models that are under $1500 so it should not be too difficult to come up with the cash. That being said, there are ways to get bank loans for a new car purchase. Note that bad credit borrowers will likely get high interest rates on these types of loans.