August 2010 Employment Numbers: Economy 200,000 jobs short of breakeven point – Unemployment rises to 9.6%

McAuley’s World Comments in Blue:

Companies add 67K workers, but jobless rate rises             AP

Thousands of Job Seekers Attend Job Fair In Detroit (Aug 2010)

WASHINGTON – Private employers hired more workers over the past three months than first thought, a glimmer of hope for the weak economy ahead of the Labor Day weekend. But the unemployment rate rose because not enough jobs were created to absorb the growing number of people looking for work.

Companies added a net total of 67,000 new jobs last month and both July and June’s private-sector job figures were upwardly revised, the Labor Department said Friday. [See my comments below]

Stocks surged after the report’s release. The Dow Jones industrial average rose more than 100 points in afternoon trading and broader indexes were all up. [Yes, after it was reported that 67,000 “net jobs’ were added and not lost … as was expected … wait until Tuesday when the vacation has ended and people return to their offices and digest the “true story” … please read on] ….

….. Overall, the economy lost 54,000 jobs as 114,000 temporary census positions came to an end. For the first time this year, the manufacturing sector lost jobs, down a net total of 27,000 for the month….

http://cbs5.com/wireappolitics/Companies.add.67.2.1894681.html

“Companies added a net total of 67,000 new jobs last month”…. no wait“Overall, the economy lost 54,000 jobs”… you cannot have a “net total increase” and “Overall, lose jobs” at the same time.

 Private companies “allegedly” added 67,000 jobs – there was no “net increase” as the economy, as a whole, lost a “net” of 54,000.

Remember that today, when the press and the Obama Administration claims that jobs have been “added”, the number includes the new “saved or created” concept. After all the numbers were “crunched”, including all the claims of “saved or created” … the economy lost a total of 54,000 jobs in August, there was “zero net jobs gained”. The net loss of 54,000 jobs includes the 67,000 jobs that were allegedly saved or created. But for the claim that there were 67,000 jobs “created or saved” the economy would have lost 114,000 total jobs in August. Once again, there was zero “net job increase” in July 2010.  

 The United States needs to “create” a minimum of 150,000 new jobs, “actual jobs” as opposed to imaginary or “virtual” jobs, each and  every month, to maintain an “employment equilibrium” – to have the economy keep pace with new workers entering the workforce – to have “zero change” in the unemployment rate – no increase – no decrease.  If employers eliminate jobs, the economy must create and equal number of new jobs, in addition to the 150,000 jobs needed to accomodate the new workers entering the work force, just to break even. The U.S. economy needed to create at least 1.2 million new jobs between January and the end of August 2010 to maintain an “employment equilibrium” for 2010. (8 months x 150,000 per month = 1.2 million). We are at least ½ million new jobs short of “employment equilibrium” for 2010 (even when we count all of the claimed “saved or created” nonsense jobs).

Query: With a short fall of ½ million new jobs to date in 2010, ½ million jobs short of keeping pace with new workers entering the workforce, never mind creating jobs to replace those jobs that have been lost, why hasn’t the unemployment rate changed (increased) since January 2010?  The January 2010 unemployment rate was 10%, today the Obama Administration claims our unemployment rate is 9.6%. If we haven’t created enough jobs to maintain an “”employment equilibrium” with the new workers entering the work force, how did our unemployment rate drop?

Example: In August 2010 the economy needed to create 150,000 new jobs to stay even with the number of new workers entering the work force. The economy actually lost 54,000 jobs …. so in August 2010 the economy was a total of 204,000 jobs short of breaking even ( 150,000 new workers entering the work force plus 54,000 jobs that were lost  in the month …).  

 The shortfall of ½ million new jobs means that the economy fell 40% short of creating enough jobs to maintain an “employment equilibrium”, never mind creating enough new  jobs to reduce the unemployment rate.

How has the Obama Administration kept the unemployment rate from rising? (How is the Obama Administration cooking the books?).

1). For every “new worker” who enters the economy without a job being created for them, the Obama Administration claims that 1 unemployed worker gives up their job search and leaves the work force. This is a fraud, but it manufactures  a false “employment equilibrium” for the press to report.

2). When the Obama Administration claims to “save” a job, the “save” can be a monthly event – a single individual working for a single employer can have the same job “saved” up to 12 times in a year. Not 12 jobs, 1 job 12 times. When 12 jobs are lost you cannot create a true “employment equilibrium” by saving 1 job 12 times, because that still leaves 11 unemployed people.

 Do I smell something burning… are those numbers done yet … shouldn’t someone stop cooking the numbers and look for some real solutions?

While I was reading various blogs today I noted an amazing number of wild claims about unemployment during G. W. Bush’s Presidency … these are the true facts and not some wild political claims:

Average Annual Unemployment Under G.W. Bush – all 8 years – 5.2 %

Highest Annual Unemployment Rate During G.W. Bush: 5.99 (2003)

Lowest Annual Unemployment Rate During G.W. Bush: 4.61 (2007) Just before the Democrats took over Congress …

B. OBAMA’S ANNUAL UNEMPLOYEMNT RATES:       2009   –  9.2%

                                                                                      Jan – Aug  2010   –  9.6%      

http://www.miseryindex.us/urbyyear.asp

May 2010 Jobs Report – Econcomy Is Still Losing Ground – Job Creation Isn’t Keeping Pace With The Number Of New Workers

The following is being reported by the Associated Press:

“The government also said 431,000 jobs overall were created last month, but most of those jobs, 411,000, came from the government’s hiring of temporary census workers. The overall number also fell short of expectations. Economists polled by Thomson Reuters had forecast employers would add 513,000 jobs.” http://news.yahoo.com/s/ap/20100604/ap_on_bi_st_ma_re/us_wall_street  http://www.heritage.org/Research/Reports/2010/06/Heritage-Employment-Report-May-Jobs-Struggle-to-Appear

The straight forward math is this, private employers added 20,000 (20 thousand) employees last month when a gain of 513,000 was expected. Over the next 60 days, the 411,000 part time census workers will rejoin the ranks of the unemployed. Last month’s (April 2010) job hires were largely due to “temporary summer hires”.

The Obama Adminiistration is claiming that the unemployment rate has dropped from 9.8% to 9.7% – a drop that isn’t being related to temporary hiring (becasue if it was related to temporary hiring – then the Obama Administration would need to report an increase in the unemployment rate after the people are “laid off” from their temporaray work)  the “lower” unemployement number is being related to the fact that “300,000 people have given up on their job searchs”.

Please note that the Government does not count an individual who has exhausted their unemployment benefits as being “unemployed”.

In our recent past the Liberal Media has reported that it takes between 150,000 and 200,000 new jobs each and every month to keep up with population growth – any “private job” creation number below that means the economy is shrinking. These statements are correct. 

With only 21,000 jobs created by private employers in May 2010, we are somewhere between 130,000 and 180,000 jobs short of breaking even for the month.

Personally, I find it surprising that no media outlet has pointed out that, over the last 6 months, the Obama Adminstration has reported that the usual “growth” in the number of individuals entering the “job market” has been off set by an equal number of people “giving up their job searches”. What a remarkable coincidence! 

Read and compare these historical statements from our liberal media: 

  •  The New York Times, 08/08/03: The economy must add about 150,000 jobs or more each month to keep up with population growth and bring down the jobless rate over a long period of time. In the 1990’s, the economy created an average of 181,000 jobs a month.  http://www.nytimes.com/2003/11/08/business/08ECON.html?pagewanted=2 
  • The San Francisco Examiner – April 3, 2004: Total jobs outside the farm sector soared by 308,000, the Labor Department reported Friday, the unemployment rate rose to 5.7 percent from 5.6 percent in February primarily because 179,000 people entered the labor force. (A net gain of 129,000 jobs and the unemployment rate went up) http://articles.sfgate.com/2004-04-03/news/17423578_1_worst-job-recovery-job-growth-labor-market
  • Washinton Post 09/04/04 : Employers added 144,000 jobs to their non-farm payrolls in August on a seasonally adjusted basis, an improvement after two months in which job growth essentially stalled, but barely enough to keep pace with population growth. http://www.washingtonpost.com/ac2/wp-dyn/A60680-2004Sep3?language=printer
  • The Los Angles Times 09/04/04: U.S. employers added a net 144,000 jobs to their payrolls in August and the nation’s unemployment rate dropped a notch to 5.4% (WOW – 5.4%, not 9.9%) –  Unless employment growth averages 228,250 a month from September through December, Bush will be the first post-Depression president to finish his term with fewer jobs than when he started. http://articles.latimes.com/2004/sep/04/business/fi-jobs4
  • The Boston Globe 01/08/05: US employers boosted payrolls by 157,000 jobs in December, keeping the economy on a path of moderate expansion and completing the first year of job growth since 2000. The month’s job gains were slightly less than analysts expected, and just enough to keep up with the natural growth of the labor force and prevent unemployment from rising.  Over the past year, the economy has averaged 186,000 new jobs a month, and whittled three-tenths of a point from the December 2003 unemployment rate of 5.7 percent. All told, the nation added a net 2.2 million jobs last year, the most since 1999, when the economy created 3.2 million. http://www.boston.com/business/globe/articles/2005/01/08/us_gains_157000_jobs_in_december/

Until the Obama Adminstration admits we are not on course for a recovery, the proper corrective measures will not be taken.

“Spinning” the numbers doesn’t help the average Amercian or improve our economy …..

We were promised that if the “Stimulus Plan” was passed the unemployment rate would not rise above 8%, and that millions of new jobs would be created in the “private sector”. Reuters reported that the Country lost over 3 million jobs in the 1st 10 months after the “stimulus” was signed 18 months ago. http://www.forbes.com/feeds/afx/2009/10/30/afx7069921.html

The New York Times has reported that the “total number of jobs lost” through the 1st of this year is 8 million. http://www.nytimes.com/2009/10/04/weekinreview/04norris.html?_r=2&scp=2&sq=floyd&st=cse

Between the start of the recession and the 1st of Janauary 2010 a total of 8.1 million jobs were lost.   http://www.epi.org/publications/entry/jobs_picture_20100108/

At the end of January 2010, the U.S. Government’s Bureau of Labor Statistics reported that the number of “jobs lost” had increased to 8.4 million.  http://dailycaller.com/2010/02/08/unemployment-drops-while-total-jobs-lost-increases/ 

On that same day, the Obama Administration reported that the unemployment rate dropped from 10% to 9.7 %. This happened despite the fact that the Administration reported that they had “overestimated job creation” by over 800,000 jobs. We lost 800,000 jobs and the unemployment rate dropped from 10% to 9.7%.  http://money.cnn.com/2010/02/04/news/economy/jobs_outlook/

In March 2010 the BLS reported a loss of 20,000 jobs in February 2010. A loss of 20,000 jobs would mean that the US was between 170,000 and 220,000 jobs short of breaking even in February 2010. The “official” unemployment rate remained “unchanged”. http://www.irishtimes.com/newspaper/breaking/2010/0303/breaking54.html

In April 2010 the Bureau of Labor Statistics reported that 162,000 jobs were created in March 2010. Temporary census jobs counted for 48,000 of the jobs while 114,000 were in the private sector. The 114,000 “private sector” jobs were certainly a welcome sign, but the number of new jobs were 50,000 jobs below the number needed to “break even” for the month. The “official” unemployment rate remained unchanged.  http://www.employmentmetrix.com/blog/2010/04/good-news-for-job-seekers-march-jobs-report-shows-growth.html?no_prefetch=1

The report for May 2010, which was relased today, is discussed above. (411,000 of 431,000 jobs created are temporary census jobs). The 20.000 jobs created in the private sector falls far short of the 150,000 to 200,000 needed to break even for the month, however, we are told that the unemployment rate dropped from 9.8% to 9.7% because 300,000 “unemployed” workers stopped looking for work.

Exactly where are these 300,000 unemployed workers who suddenly gave up on finding work? What a surpise! A 6th straight month where the “job creation numbers” fall short of the “break even point” without a single increase in the “unemployment rate”.  

I’m sorry, I don’t believe it for a minute. These numbers are more thoroughly cooked than my Christmas Goose!   

If an individual has “access” to unemployment benefits they must report that they are “able, available and seeking” work …… in order to collect benefits. 

It appears that the number of “lay-offs” per month may have returned to pre-recession levels, however, new job creation is not keeping pace with the natural and historical growth in the Country’s labor pool. If “job creation” isn’t keeping pace with the natural growth rate of the “labor pool” we should be seeing, as we have always seen in the past, an increase in the monthly unemployment rate.  http://www.heritage.org/Research/Reports/2010/06/Heritage-Employment-Report-May-Jobs-Struggle-to-Appear

The economy is not in recovery and if the books were not being cooked, the unemployment rate would be rising.

When President Obama says “our economic policies are working” and “we are heading in the right direction” he is either in self denial or he is, as is claimed, more interested in “spinning” the facts for his personal poltical benefit than he is interested in helping working Americans, or more imporantly, helping those Americans who wish they were working.

For a comparison of the average annual unemployment rates during the George W Bush Presidency and our 1st 18 months under Barack Obama (Chart of average annual unemployment rates from 1948 through 2009) see: http://www.miseryindex.us/URbyyear.asp?StartYear=1948&EndYear=2009

Just How Bad Was The Bush Economy – 2% Unemployment – April 10, 2005

Those “Bad Old” Bush Days – Unemployment Rate 2% – April 10, 2005

Posted on April 14, 2009 by mcauleysworld | Edit

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UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending April 30, the advance figure for seasonally adjusted initial claims was 333,000, an increase of 11,000 from the previous week’s revised figure of 322,000. The 4-week moving average was 321,500, a decrease of 2,000 from the previous week’s revised average of 323,500.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending April 23, unchanged from the prior week’s unrevised rate of 2.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending April 23 was 2,589,000, an increase of 38,000 from the preceding week’s revised level of 2,551,000. The 4-week moving average was 2,606,500, a decrease of 24,250 from the preceding week’s revised average of 2,630,750.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 288,626 in the week ending April 30, a decrease of 12,249 from the previous week. There were 283,236 initial claims in the comparable week in 2004.

The advance unadjusted insured unemployment rate was 2.0 percent during the week ending April 23, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,570,929, a decrease of 41,651 from the preceding week. A year earlier, the rate was 2.3 percent and the volume was 2,915,357.

Extended benefits were available in Alaska during the week ending April 16.

Initial claims for UI benefits by former Federal civilian employees totaled 974 in the week ending April 23, a decrease of 132 from the prior week. There were 1,974 initial claims by newly discharged veterans, a decrease of 242 from the preceding week.

There were 14,361 former Federal civilian employees claiming UI benefits for the week ending April 16, a decrease of 17 from the previous week. Newly discharged veterans claiming benefits totaled 26,320, an increase of 661 from the prior week.

The highest insured unemployment rates in the week ending April 16 were in Alaska (5.1 percent), Puerto Rico (4.1), Michigan (3.5), Oregon (3.1), New Jersey (3.0), Pennsylvania (3.0), Wisconsin (2.8), Massachusetts (2.7), Vermont (2.7), and California (2.6).

The largest increases in initial claims for the week ending April 23 were in Massachusetts (+5,534), Kentucky (+4,080), California (+3,257), Texas (+2,974), and Connecticut (+2,396), while the largest decreases were in Minnesota (-2,801), Tennessee (-2,201), Wisconsin (-880), Pennsylvania (-865), and South Carolina (-707).

http://www.dol.gov/opa/media/press/eta/ui/eta20050796.htm

UPDATE: June 10, 2009 – The uneployment rate now stands at 9.4%. Pending the 12 weekly upward revision of unemployment data the percentage of unemployed may surpass 10%. At the time of Obama’s election in November 2008 the unemployment rate was 6.5%. For every 2 people out of work when Obama was elected we know have 3 people out of work.

Update: 01/30/2010 – The Democrats took control of Congress in January 2006 and have retained control ever since. Why not blame Bush …..

Bureau Of Labor Statistics – 2.9 Million Fewer Job Openings Today – Employment “Separations” Continue To Outpace “New Hires”

The job openings rate was little changed in September at an enemic rate of 1.9 percent. The number of job openings has fallen by 2.3 million, or 48 percent, since the most recent peak in June 2007.
These data are from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey and are seasonally adjusted. Data for the most recent month are preliminary and subject to revision. Find additional information in “ Job Openings and Labor Turnover—September 2009”. Hires are the total number of additions to the payroll occurring at any time during the reference month. Separations are the total number of terminations of employment occurring at any time during the reference month, and are reported by type of separation—quits, layoffs and discharges, and other separations.

Source: US Department of Labor Bureau of Labor Statistics

 

 

Associated Press – Economy’s rebound not as strong as first thought – Growth Overstated By 25%

By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer 10 mins ago

WASHINGTON – The economy is growing modestly, with consumers too wary about spending to invigorate the recovery.

That picture emerged Tuesday from reports on the nation’s economy and the confidence of consumers, who power 70 percent of it. The economy grew at a 2.8 percent rate last quarter — less than originally estimated. And forecasts for the current quarter are for similarly slight growth before a drop-off next year.

The main reasons are that consumers remain reluctant to spend, commercial construction has slipped and imports are dampening U.S. growth.

The Commerce Department’s new reading on gross domestic product was weaker than the 3.5 percent growth rate for the July-September period estimated just a month ago. The GDP, which measures the value of all goods and services produced in the United States, also was a tad weaker than the 2.9 percent growth rate that economists surveyed by Thomson Reuters had expected.

At the same time, the Conference Board’s latest survey of consumer confidence found that as retailers enter the crucial holiday season, shoppers remain gloomy. Unemployment and tight credit have sapped consumers’ willingness and ability to spend freely.

Also Tuesday, the Standard & Poor’s/Case-Shiller home price index of 20 major cities suggested that the housing market’s recovery is continuing, if only gradually. Home prices rose slightly in September. Compared with a year earlier, though, they remain down 9.4 percent.

http://news.yahoo.com/s/ap/20091124/ap_on_bi_go_ec_fi/us_economy

Just like the bogus “jobs created or saved” numbers – the Obama Administration continues to politicize the numbers …. GDP growth was overstated by 35% and home sales – which are repeatedly touted as being “up” are in fact down between 9% and 10% from last year – one of the worst years on record ………

On The Road To Economic Recovery Or On The Eve Of A Great Depression

The following claims can be confirmed at these sites:

http://stockcharts.com/charts/historical/djia19201940.html                                                                                                           http://seansrant.com/ive-said-it-before-and-ill-say-it-again-the-decline-still-isnt-over-and-heres-why-im-short-the-djia/

The DJIA high in 1929 was 381.17. After the 1929 “crash” the DJIA stood at 198.69, a 48% drop.

The DJIA “rebounded in 1930 to a high of  294.07, a gain of 95.38 points, a nearly 50% recovery, a recovery very similar to our current recovery in 2009/2010.

The real “crash” of the Great Depression began in late 1930 when the DJIA began a decline to a level of 41.22 in 1933. Between 1930 and 1933 there were several sharp “spikes” upward, followed by precipitous drops of the DJIA.

Does our current “spike” indicate a recovery? Certainly not!

The toxic assets are still on the Bank’s books, yet the financial marklets are leading the recovery. Commercial real estate is on the brink of collapse, home mortgage foreclosures continue to climb – while the Obama mortgage assistance program has resulted in less than 2000 permanently modified mortgages – the President pledged to help 9,000,000. Credit card defaults and personal bankrupties continue to climb and the unemployment rate – incorrectly called a “lagging indicator” – continues to climb. Unemployment doesn’t lag – it is “current” – unemployment can only be said to “lag” other indicators which are actually “predicting” future activity. The DJIA current level is “predciting” that “profits” and associated dividends will be better six months from now -that ”prediction” is based on a set of “assumptions”, one of the assumptions is that unemployment will improve and not worsen. The unemployment rate predicts nothing – it is a number that “understates” a current condition.

The DJIA is not predicative of economic health.  

The following from: http://www.online-stock-trading-guide.com/great-depression-stock-chart.htm

1929-1930 Stock Chart 1   
 
If you changed the dates from 1929 – 1930 to 2007 – 2009 you’d have an almost identical set of charts. http://seansrant.com/ive-said-it-before-and-ill-say-it-again-the-decline-still-isnt-over-and-heres-why-im-short-the-djia/

1930 Stock Chart
 
1932 Stock Chart
 
 
1928-1933 Stock Chart
 
1928-1955 Stock Chart
 
 The DJIA has “zero” value in predicting whether our economic health has “turned” the corner.

AP - CHANGES headline and intro text; graphic shows total foreclosure filings for past 13 months ...

AP – CHANGES headline and intro text; graphic shows total foreclosure filings for past 13 months …The foreclosure crisis affected nearly 938,000 properties in the July-September quarter, compared with about 890,000 in the prior three months, according to a report released Thursday by RealtyTrac Inc. That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year.

Unemployment is the main reason homeowners are falling into trouble. While the economy is likely out of recession, the unemployment rate — now at a 26-year high of 9.8 percent — isn’t expected to peak until the middle of next year.  

http://www.charter.net/news/read.php?id=15958748&ps=1011&srce=news_class&action=1&lang=en&_LT=HOME_USNWC00L1_UNEWS 

This is after an 81% increase in mortage foreclosures between 2007 and 2008. http://www.thestandard.com.hk/breaking_news_detail.asp?id=11900

Credit card defaults up at major lenders

Over the past few months, banks had been releasing some promising figures regarding credit card defaults – but new data suggests that any signs of improvement may not be lasting.

The latest figures from major lenders implies that previous progress could be more accurately credited to seasonal factors and Americans paying down credit card debt with their tax refunds, according to Bloomberg.

Banks including JPMogan Chase, Bank of America, Citigroup and Discover all reported an increase in credit card defaults – also known as charge-offs – during August. Charge-offs reflect credit card accounts that issuers deem uncollectable.

In particular, BofA reported that charge-offs climbed from 13.8 percent to 14.5 percent last month, while Citigroup saw a rise from 10 percent to 12.1 percent during the same period.

http//www.credit.com/news/credit-debt/2009-09-16/credit-card-defaults-up-at-major-lenders.html  

What is the truth about the underlying fundamentals is our economy ……

At foreclosure auctions, broken dreams on sale

On 11:52 am EDT, Thursday October 15, 2009

CHICAGO (Reuters) – The seven-bedroom, three-bath house in this city’s West Garfield Park neighborhood had once been someone’s American Dream.

But at a recent auction of about 100 foreclosed houses and condos, it was just Property No. 20 — and drawing no bids from a roomful of buyers despite its bargain-basement price.

“Any interest in this home at $7,000?” fast-talking auctioneer Renee Jones asked the crowd. “If not, we’ll move on.”

 http://finance.yahoo.com/news/At-foreclosure-auctions-rb-853906128.html?x=0&.v=1

 Foreclosures rise 5 percent from summer to fall

US foreclosures keep soaring as unemployment remains main cause of housing woes

By Alan Zibel, AP Real Estate Writer

On 1:59 pm EDT, Thursday October 15, 2009

WASHINGTON (AP) — The number of U.S. households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.

 

AP Reports, “Rising unemployment accelerates foreclosure crisis”, Economy continues downward spiral. Credit Default Rates Up.

WASHINGTON – Relentlessly rising unemployment is triggering more home foreclosures, threatening the Obama administration’s efforts to end the housing crisis and diminishing hopes the economy will rebound with vigor.

In past recessions, the housing industry helped get the economy back on track. Home builders ramped up production, expecting buyers to take advantage of lower prices and jump into the market. But not this time.

These days, homeowners who got fixed-rate prime mortgages because they had good credit can’t make their payments because they’re out of work. That means even more foreclosures and further declines in home values.

The initial surge in foreclosures in 2007 and 2008 was tied to subprime mortgages issued during the housing boom to people with shaky credit. That crisis has ebbed, but it has been replaced by more traditional foreclosures tied to the recession.

Unemployment stood at 9.5 percent in June and is expected to rise past 10 percent and well into next year. The last time the U.S. economy was mired in a recession with such high unemployment was 1981 and 1982.

But the home foreclosure rate then was less than one-fourth what it is today. Housing wasn’t a drag on the economy, and when the recession ended, the boom was explosive. (The economic recovery of the 1980’s was fueled by Reagan’s tax cuts and a shrinking of Government – a formula we won’t see from this Administration).

No one is expecting a repeat. The real estate market is still saturated with unsold homes and homes that sell below market value because they are in or close to foreclosure.

“It just doesn’t have the makings of a recovery like we saw in the early 1980s,” says Wells Fargo Securities senior economist Mark Vitner, who predicts mortgage delinquencies and foreclosures won’t return to normal levels for three more years.

Almost 4 percent of homeowners with a mortgage are in foreclosure, and 8 percent on top of that are at least a month behind on payments — the highest levels since the Great Depression.

In the last 12 months, 15% of mortgages have had forclosure completed.

http://news.yahoo.com/s/ap/20090716/ap_on_re_us/us_foreclosure_crisis_unemployment

Obama’s Trillion Dollar Mortgage Modification Program, which he promised would help 9,000,000 (9 Million), has in fact provided temporary relief to less than 75,000 (Seventy Five Thousand). Many of the 75,000 have, after receiving a modification, now slipped into foreclsoure anyway. 

Credit card defaults keep climbing

Default rates in May continue to rise as borrowers struggle with the weak job market.

NEW YORK (CNNMoney.com) — Banks continue to write off credit card debt as consumers hurt by record high unemployment default at an increasing rate.

Regulatory forms filed this week by some of the nation’s largest banks showed default rates on credit cards rose in May. The default rate is a measure of loans that the bank does not expect to be repaid.

“Data from May showed continued signs of stress for card issuers, reflective of worsening unemployment trends and deteriorating macro [economic] conditions,” analysts at Bernstein Research said in a report Tuesday.

Bank of America the nation’s largest bank, said its default rate jumped to 12.5% in May from 10.5% the month before. Other major banks, including Citigroup, JPMorgan Chase and Capital One also reported increases in May default rates.

http://money.cnn.com/2009/06/16/news/companies/credit_card_losses/index.htm?section=money_latest

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