Indeed, domestic spending fell more than in previous programmes, with the clearest difference appearing in the behaviour of private consumption (Figure 2). The current significant reduction in household spending reflects the contraction of disposable income, the impact of the restrictions on access to credit and the effect of high indebtedness on the ability to smooth consumption.
The unemployment rate for adults with a high school education or less fell from 4¾ percent in 1998 to around 4 percent by the middle of last year. And, while the proportion of small-business managers who worried about labor quality has remained elevated in the past few years, it did not increase further in spite of the decline in unemployment.