This factor is the most important one to be considered in the decision to whether to open up a new business or stick to ones job. Since the economy has slowed down dangerously and even people running businesses are feeling the crunch to an extent that they are looking for jobs for side income. This simply proves that the condition is not favorable to start a new business obviously.
Since business investments have declined as a result of a fall in consumer spending and also the credit crunch then the economy shows no favorable signs for opening up a new business. The Federal Reserve has proved to the fact that consumer spending has fallen to alarming levels. All sorts of business like retail, automobile, tourism, manufacturing companies and even real estate deals are feeling the economic crunch to a surprising level. A number of them are at the brink of a bankruptcy due to the financial crisis they face and also that the economy has slowed down. Since all credit nations are now feeling the economic crunch as a result of the problem created by the sub prime mortgages and the financial meltdown all over the world. Thus businesses feel that capital is not that readily available as before. For e.g. a number of loans are not provided any more especially in certain industries like engineering or construction due to which business investment has slowed down or almost come to a halt and all related businesses are feeling the crunch more than ever. All large and small businesses feel that capital is not readily available just like before and the situation has changed. Due to these issues unemployment is growing on a daily basis. Recently unemployment rate has broken all past records which are horrific for such an economy.
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