Economy sheds larger-than-expected 190,000 jobs in October
The Associated Press
updated 8:01 a.m. CT, Fri., Nov . 6, 2009

WASHINGTON - The unemployment rate has surpassed 10 percent for the first time since 1983 — and is likely to go higher.

Nearly 16 million people can't find jobs even though the worst recession since the Great Depression has apparently ended. The Labor Department said Friday that the economy shed a net total of 190,000 jobs in October, less than the downwardly revised 219,000 lost in September. August job losses were also revised lower, to 154,000 from 201,000.

But the loss of jobs last month exceeded economists' estimates. It's the 22nd straight month the U.S. economy has shed jobs, the longest on records dating back 70 years.

Counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent, the highest on records dating from 1994.

The jobless rate rose from 9.8 percent in September.

Friday's report is the first since the government said last week that the economy grew at a 3.5 percent annual rate in the July-September quarter, the strongest signal yet that the economy is rebounding. But that isn't fast enough to spur rapid hiring, raising worries of a jobless recovery.

In addition, many economists worry that persistently high unemployment could undermine the recovery by restraining consumer spending, which accounts for 70 percent of the economy.

One sign of how hard it still is to find a job: the number of Americans who have been out of work for six months or longer rose to 5.6 million, a record. They comprise 35.6 percent of the unemployed population, matching a record set last month.

Congress sought to address the impact of long-term unemployment this week by approving legislation extending jobless benefits for the fourth time since the recession began. The bill would add 14 to 20 extra weeks of aid and is intended to prevent almost 2 million recipients from running out of unemployment insurance during the upcoming holiday season. President Barack Obama is expected to quickly sign the legislation.


The employment report showed that job losses remain widespread across many industries. Manufacturers eliminated a net total of 61,000 jobs, the most in four months. Construction shed 62,000 jobs, down slightly from the previous month.

Retailers, the financial sector and leisure and hospitality companies all continued to reduce payrolls.

But temporary employment grew by 33,700 jobs, after losing positions for months. That's a positive sign because employers are likely to add temporary workers before hiring permanent ones.

http://www.msnbc.msn.com/id/33713864/ns/business-stocks_and_economy/

U6 is closer to 17%

http://www.shadowstats.com/

U6 is generally what counts.....

I totally believe 16% is closer to the truth, too, shane!

We've been very fortunte in my part of the world - not too many laid off, yet.

Unemployment rates rise in 29 states
More states report rising unemployment rates, though fewer report joblessness above the national average in October.
By David Goldman, CNNMoney.com staff writer
Last Updated: November 20, 2009: 12:12 PM ET

NEW YORK (CNNMoney.com) -- A growing number of states reported rising jobless rates in October, and thirteen states reported unemployment rates above the national average of 10.2%, according to a government report released on Friday.

Overall, jobless rates increased in 29 states and the District of Columbia last month, while they fell in 13 states, according to a monthly Labor Department survey on state unemployment.

In September, 23 states and Washington D.C. reported that their unemployment rates increased, and 14 states had jobless rates above the national average.

Michigan remained the state with the highest rate of unemployment at 15.1%, though that rate was down 0.2 percentage points from September. October was the 11th straight month in which Michigan posted an unemployment rate above 10%.

Still, that's nowhere near the 68-consecutive months in which Michigan had double-digit unemployment between 1980 and 1985. That included a record high of 16.9% in November 1982.

Some signs of improvement
In a sign that the worst-hit state may be experiencing a glimmer of recovery, Michigan added 38,600 jobs in October, more than any other state except for Texas, which added nearly 42,000 jobs. California added 25,700 jobs last month.

In fact, the Labor Department reported that 28 states added jobs in October.

"While we have been focusing on a very broad, deep recession, as we get into a recovery, we may see some more regional improvements," said Robert Dye, senior economist at PNC Financial Services Group.

"Those that will do well are areas tied to the federal government, manufacturing, oil production and trade. But those more heavily exposed to the housing industry will lag behind."

Dye said Texas, Louisiana and the surrounding Washington D.C. areas in particular will start creating jobs faster than other locations. Florida, Arizona and Nevada, which have been hit the hardest by the housing crisis, will continue to lose jobs, he said.

Unemployment rates, which are taken from a separate survey, tend to rise even as the employers start hiring again, because the survey only counts people who are looking for work. When times are bad, many people become discouraged and give up their job search, so they are not counted in the unemployment data.

Job losses nationwide
Every state had an unemployment rate in October that was higher than a year ago, and every state has lost jobs over the course of the year.

The vast majority of states showed very slight increases or decreases in their unemployment rates. Only a few had significant jumps in their jobless rates. Unemployment rates in Alaska and Wyoming both rose 0.6 percentage points. Arkansas' rate grew 0.5 points last month.

North Dakota continued to post the lowest jobless rate, coming in at 4.2%, which was unchanged from September. It was followed by Nebraska with 4.9%, South Dakota at 5%, Montana at 6.4%, and Vermont and Utah at 6.5%.

Unemployment was highest in the western part of the country. That region now has a jobless rate of 10.8% -- the highest rate ever in the 33-year old state unemployment report. The Northeast again had the lowest rate of unemployment at 9%, the same level as the previous month.

Earlier in November, the Labor Department reported that the nation's unemployment rate rose above 10% for the first time since 1983.

With unemployment rising, the Obama administration announced it will hold a jobs summit on Dec. 3. Obama will meet with financial experts and business leaders to discuss strategies to deal with the nation's labor problem.

To make matters worse, a government report released on Wednesday showed that 1 million people could lose their unemployment benefits in January if Congress doesn't extend federal aid to the jobless. Earlier this month, President Obama signed a bill to extend government-provided unemployment insurance, but the law only helps those who exhaust their benefits by the end of 2009.

http://money.cnn.com/2009/11/20/news/economy/state_unemployment/index.htm

States’ jobless funds going ‘absolutely broke’


By Peter Whoriskey
The Washington Post
updated 1:08 a.m. CT, Tues., Dec . 22, 2009

The recession's jobless toll is draining unemployment-compensation funds so fast that according to federal projections, 40 state programs will go broke within two years and need $90 billion in loans to keep issuing the benefit checks.

The shortfalls are putting pressure on governments to either raise taxes or shrink the aid payments.

Debates over the state benefit programs have erupted in South Carolina, Nevada, Kansas, Vermont and Indiana. And the budget gaps are expected to spread and become more acute in the coming year, compelling legislators in many states to reconsider their operations.

Currently, 25 states have run out of unemployment money and have borrowed $24 billion from the federal government to cover the gaps. By 2011, according to Department of Labor estimates, 40 state funds will have been emptied by the jobless tsunami.

"There's immense pressure, and it's got to be faced," said Indiana state Rep. David Niezgodski (D), a sponsor of a bill that addressed the gaps in Indiana's unemployment program. "Our system was absolutely broke."

Give-and-take
The Indiana legislation protected the aid checks, Niezgodski said, but it came after a give-and-take this spring in which Gov. Mitchell E. Daniels Jr. (R) said the state had been providing "Rolls-Royce benefits" and several thousand union workers countered by protesting proposed cuts at the state capitol. In January, the legislature is slated to consider a bill to delay the proposed tax increases intended to refill the fund.

In Nevada, Gov. Jim Gibbons (R) and legislators have feuded over the unemployment program, which is $85 million in debt to the federal government, with Gibbons accusing the legislature of "callous disregard" for not setting a tax rate.

And last week, a state task force in Kentucky recommended cutting benefits about 9 percent and imposing a week's delay in their payment. The average benefit check there is about $309 a week. The task force also proposed raising taxes.

"There were some moments of high anxiety" during the negotiations between industry and labor groups, said Joseph U. Meyer, the state's acting secretary of education and workforce development. "But in the end, the realistic options became fairly apparent."

Two choices
State unemployment-compensation funds are separated from general budgets, so when there is a shortfall, only two primary solutions are typically considered -- either cut the benefit or raise the payroll tax.

Industry and business groups often lobby against raising the payroll tax on employers, while unions and other worker groups protest benefit cuts.

"We want to make sure Kentucky remains competitive and also maintain an environment of fairness," Meyer said of the negotiations.

Nationally, the average tax is about 0.6 percent of payroll; the average weekly check is about $300.

Not prepared
The troubles the state programs face can be traced to a failure during the economic boom to properly prepare for a downturn, experts said.

Unemployment benefits are funded by the payroll tax on employers that is collected at a rate that is supposed to keep the funds solvent. Firms that fire lots of people are supposed to pay higher rates. The federal government pays for administrative costs, and in a recession, it pays for the extension of unemployment benefits beyond 26 weeks. But over the years, the drive to minimize state taxes on employers has reduced the funds to unsustainable levels.

"The benefits haven't grown -- that's not the problem," said Richard Hobbie, director of the National Association of State Workforce Agencies.

Even so, he said, he expects to see unemployment checks reduced.

A shortfall in a state unemployment fund, he said, "usually means cuts in eligibility or benefits."

In Virginia, the unemployment program has borrowed $89 million from the federal government, while Maryland has not borrowed, according to the federal data.

Wayne Vroman, an expert in unemployment insurance at the Urban Institute, said that entering the recession, state programs were on average funded at only one-third the level they should have been, according to generally accepted funding guidelines.

"If you fund a program adequately, you don't need to come to these kinds of difficult decisions," he said.

Before the recession, he said, the funding guidelines "were rarely honored."

While the amount of the states' loans from the federal government is expected to grow rapidly, it is not expected to add to the federal debt. "In the past, the federal government has always gotten its money back," Vroman said.

Struggling to fill the gap
In the meantime, however, more states are struggling to fill the gap. West Virginia imposed a freeze on benefit levels this year, and legislators in South Carolina are considering one.

"We've obviously got problems with the fund," said South Carolina House Majority Leader Kenny Bingham (R), blaming the trouble in part on the state's unemployment rate of more than 12 percent.

The state owes about $654 million to the federal government for unemployment payments.

"We're not trying to cut benefits," he said. But "if you jack rates up, those business that are struggling to hang on, you make things more difficult."

http://www.msnbc.msn.com/id/34519544/ns/business-washington_post/

1 in 5 Working-Age American Men Don't Have A Job

One in five working-age American men does not have a job, according to the latest federal employment numbers, an all-time low that illustrates the extraordinary toll this recession has taken on male-dominated professions in particular.

Men are more likely to work in sectors like manufacturing and construction that are more sensitive to economic downturns. But this downturn has been particularly brutal on those industries, leading some observers to call it a "mancession."

Only 80.3 percent of men age 25-54 had jobs in December -- the lowest since the Bureau of Labor Statistics started collecting that data in 1948 -- at which point the figure was 94.4 percent. When the recession began in December 2007, less than 13 percent of men in this age bracket were out of work.

The numbers are derived from what the BLS calls its employment-to-population ratio. While the non-working number in this case includes men who have voluntarily chosen to stay out of the workforce, such as students and stay-at-home dads, in many ways it provides a clearer picture of the depth of the nation's unemployment situation.

The percentage of women age 25-54 who have work is also down, but not as dramatically. Some 69.1 percent of those women are employed, about the same as in 1998. Women dominate the fields such as education, health services and government. The health industry and government payrolls are booming, and are expected to continue growing, thanks to an aging population and recently-enacted stimulus programs to boost the economy, respectively.

Overall, the percentage of Americans over age 16 that holds a job continues to slide, reaching 58.2 percent. That's a 25-year-low.

"It is striking that we have managed to reverse more than 26 years of increasing labor force participation in this downturn," said Dean Baker, co-director of the Washington, D.C.-based Center for Economic and Policy Research. "It will take a long time for workers to get over the effects of this recession."

The official unemployment rate, which doesn't include people who are underemployed or who have given up looking for work, remained at 10 percent.

According to the BLS, employers nationwide shed an additional 85,000 jobs in December. Analysts had predicted a decline of just 10,000 jobs.

The extent of the job losses indicates that the optimism generated by last month's slight dip in the unemployment rate (from 10.2 to 10 percent) may have been unfounded. Revised figures released today show an actual increase of 4,000 jobs in November - but that's now been offset 20 times over in December.

More than 6.3 million people are looking for jobs, according to the new figures, a 14 percent increase from December 2008.

Lawrence Mishel, president of the Economic Policy Institute, points out that 1.9 million workers have left the labor force since May. These are people who are either seeking work or working. More than 660,000 workers left the labor force between November and December alone.

"Absent this flight from the labor market the unemployment rate would have risen substantially in December, up 0.4 percent, rather than hold steady," he said in an e-mail.

Mishel also notes that the population has grown, which should have led to a rise in the labor force. Instead, just the opposite has happened. He writes:

Over the last year, the working age population grew by 0.8 percent, so we would have expected a growth in the labor force, those working or seeking work, by 1.2 million people. Instead, the labor force fell 1.5 million, indicating that the labor force is missing 2.7 million people, more than half of whom abandoned the labor force. The erosion of the labor force started occurring after May, with 271,000 withdrawing each month for the last seven months. Two-thirds of those fleeing the labor market since May have been adult men.

http://www.huffingtonpost.com/2010/01/08/1-in-5-working-age-americ_n_415984.html

Building, manufacturing jobs slammed hard
Blue-collar job losses contrast with growth in health services, professions
updated 12:44 p.m. CT, Fri., Jan. 8, 2010

There's a major hurdle to the U.S. economy's recovery: The mismatch between the skills held by the millions of people who are losing jobs and the expertise needed for the few jobs that are being created.

The nation lost 53,000 construction jobs during December, the Bureau of Labor Statistics reported Friday, the lion's share of the net 85,000 jobs lost last month. It also shed 27,000 manufacturing jobs. Taken together, those two sectors have shed about 3.7 million jobs since the recession began in December of 2007.

By contrast, areas that saw job growth during the month included health services, which added around 22,000 jobs in December, and professional sectors such as architecture and engineering services, computer systems design and administrative and support services.

“The mismatch is there. People with certain kinds of skills that may not be readily transferable to other parts of the economy … continue to be hit really hard in this downturn,” said Joel Naroff of Naroff Economic Advisors.

The job losses have been so extreme in sectors such as construction that many believe it could take several years for employment to return to its pre-recession levels.

In the meantime, millions of construction workers are unemployed and lack the training to get a job in the few fields that are hiring.

They also may simply not be a good fit.

“Do construction workers really want to go into an office?” Naroff said. “Those are really skilled workers, and a lot of them choose a lifestyle because they like it.”

Jobs in areas such as auto manufacturing may never return, leaving those workers with no choice but to find a job in a new field.

“It’s pretty clear there’s going to be a lot of structural unemployment, which means there’s a lot of people who have been laid off from jobs that just don’t exist anymore,” said Marisa Di Natale, a director at Moody’s Economy.com.

That could lead to higher levels of unemployment even after the economy has recovered more fully. Also, even if manufacturing workers eventually find new work, growing global competition may force them into jobs that pay less than the ones they lost.

“They have skills that might be transferable, but the question is, are they going to be able to match the kinds of salaries and benefits they were making in those companies?” Naroff said. “A lot of people could be looking at a fairly permanent reduction in (salary).”

In total, the nation lost more jobs than most forecasters had expected in December, and the unemployment rate stayed steady at 10 percent.

One bright spot: Manufacturing job losses were not as bad as in the early months of the recession, which began in December 2007. Although that could be a sign the sector is stabilizing, it doesn’t mean factory jobs will return anytime soon.

Another potential positive is the continued increase in temporary help services. Employers added 47,000 temporary jobs in December, marking the fifth straight month of growth. Employers often add temporary positions before they commit to permanent jobs.

In contrast, the number of people who have been unemployed for six months or more reached 6.1 million in December, and now account for about 40 percent of unemployed Americans. Also, some people have dropped out of the labor force completely because they are so discouraged about their job prospects.

The unemployment report follows a week of economic news showing the U.S. recovery plodding along, although in fits and starts.

The Institute for Supply Management, a trade group of purchasing executives, reported stronger-than-expected manufacturing activity in December, and similar reports from other parts of the world also were encouraging.

The ISM also reported this week that the service sector showed marginal growth in the month, though it was less than many had hoped.

Many of the nation’s retailers reported slight gains for the holiday season, despite high unemployment and worries that consumers would be extremely frugal. The International Council of Shopping Centers said sales rose 1.8 percent for the November-December period, an improvement over the steep drop in the same period last year.

On Thursday, the government said the number of new claims for unemployment benefits barely rose last week, another sign that the worst recession since the Great Depression may be easing. Oil prices also have rallied sharply in recent weeks.

There also are plenty of signs that any economic recovery will not be smooth.

Construction spending dipped slightly in November, and the number of people preparing to buy a home in November fell sharply. That’s leading some to fear a double-dip in the housing market, which could hinder any recovery.

For most people, however, it will not feel like the nation is in an economy recovery until more Americans are back at work. That could take months, or even years.

“Unfortunately, the labor market is one of the last parts of the economy turn around in a recovery,” Di Natale said.

http://www.msnbc.msn.com/id/34767759/ns/business-economy_at_a_crossroads/

New jobless claims rise unexpectedly
Four-week average increases for the first time since August
BREAKING NEWS
The Associated Press
updated 8:00 a.m. CT, Thurs., Jan. 21, 2010

WASHINGTON - The number of newly-laid off workers seeking jobless benefits unexpectedly rose last week, as the economy recovers at a slow and uneven pace.

Layoffs have slowed and the economy began to grow in last year's third quarter, but companies are reluctant to hire new workers. The unemployment rate is 10 percent and many economists expect it to increase in the coming months.

The Labor Department said Thursday that initial claims for unemployment insurance rose by 36,000 to a seasonally adjusted 482,000. Wall Street economists expected a small drop, according to Thomson Reuters.

The four-week average, which smooths fluctuations, rose for the first time since August, to 448,250.

The weekly claims figure is volatile and it can take time for trends to emerge. A Labor Department analyst said that much of the increase last week was due to administrative backlogs leftover from the winter holidays in the state agencies that process the claims.

Claims have dropped steadily since last fall, as companies cut fewer jobs. That has caused some economists to hope that hiring may increase soon. Initial claims have dropped by 50,000, or almost 10 percent, since late October.

Still, the economy is not consistently generating net increases in jobs. The Labor Department said earlier this month that employers cut 85,000 jobs in December, after adding only 4,000 in November. November's increase was the first in nearly two years.

Many economists say the four week average of claims will need to fall to below 425,000 to signal that the economy is close to generating net job gains.

Meanwhile, the number of people continuing to claim regular benefits dropped slightly to just under 4.6 million. The continuing claims data lags initial claims by a week.

But the so-called continuing claims do not include millions of people who have used up the regular 26 weeks of benefits customarily provided by states and are now receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

More than 5.9 million are receiving extended benefits in the week ending Jan. 2, the latest data available, an increase of more than 600,000 from the previous week. The data for emergency benefits lags initial claims by two weeks.

The increasing number of people claiming extended unemployment insurance indicates that even as layoffs are declining, hiring hasn't picked up. That leaves people out of work for longer and longer periods of time.

Among the states, California saw the largest increase in claims, with 16,160. Texas, Florida, Pennsylvania and Georgia saw the next largest increases. The state data lags the initial claims data by a week.

Oregon saw the biggest drop in claims, of 5,784, followed by Iowa, Kentucky, Michigan and Massachusetts.

http://www.msnbc.msn.com/id/34972573/ns/business-stocks_and_economy/

Jobless Claims Rise Unexpectedly to 480,000

AP

The number of newly laid-off workers filing initial claims for jobless benefits rose unexpectedly last week, evidence that layoffs are continuing and jobs remain scarce.

...more at link: http://www.foxnews.com/politics/2010/02 ... xpectedly/?

Jobless benefits start ending on Sunday
By Tami Luhby, senior writer
February 26, 2010: 3:55 PM ET

NEW YORK (CNNMoney.com) -- Depending on extended unemployment benefits to see you through the Great Recession?

You'd better not: The Senate failed to push back the Feb. 28 deadline to apply for this safety net.

Starting Monday, the jobless will no longer be able to apply for federal unemployment benefits or the COBRA health insurance subsidy.

Federal unemployment benefits kick in after the basic state-funded 26 weeks of coverage expire. During the downturn, Congress has approved up to an additional 73 weeks, which it funds.

These federal benefit weeks are divided into tiers, and the jobless must apply each time they move into a new tier.

Because the Senate did not act, the jobless will now stop getting checks once they run out of their state benefits or current tier of federal benefits.

That could be devastating to the unemployed who were counting on that income. In total, more than one million people could stop getting checks next month, with nearly 5 million running out of benefits by June, according to the National Unemployment Law Project.

Lawmakers repeatedly tried to approve a 30-day extension this week, but each time, Sen. Jim Bunning, R-Ky., prevented the $10 billion measure from passing, saying it needs to be paid for first.

"Right now, the 1.2 million workers who will lose benefits in March are being held hostage by partisan attempts to delay and block this critical legislation," said Christine Owens, executive director of the National Employment Law Project.

The challenges facing job growth
Senate Democrats plan to introduce legislation next week that pushes back the deadline as much as a year, an aide said. The House approved a bill in December that extended the deadline to the end of June.

Of course, once the measure is approved, the jobless would be able to reapply for federal benefits, though they would not receive missed payments.

Critical checks
About 11.5 million people currently depend on jobless benefits. Nearly one in 10 Americans are out of work and a record 41.2% have been unemployed for at least six months. The average unemployment period lasts a record 30.2 weeks.

The unemployment rate, which now stand at 9.7%, is expected to rise in February as snowstorms in many states disrupted the economy and stalled hiring.

While unemployment benefits now run as long as 99 weeks, depending on the state, not everyone will receive checks for that long a stretch if the deadline to apply is not extended.

Those extended benefits are vital, experts said. While the economy is slowly recovering, hiring is expected to remain slow in coming years. The unemployment rate is expected to remain at about 10% this year, according to the White House Council of Economic Advisers, and won't fall back to its 2008 level of 5.8% for another seven years.

"Those benefits will expire, but the need to heat their homes and put gas in their cars doesn't expire," said Senate Majority Leader Harry Reid, D-Nev., on Friday. "Those benefits will expire, but the need to take their medicine, or support an aging parent, or take care of their children doesn't expire.

Congressional gridlock
The jobless have anxiously watched from the sidelines as efforts to push back the deadlines took many twists and turns in recent weeks.

The extensions were included in an $85 billion bipartisan job creation draft bill that was unveiled in the Senate earlier this month. But then Reid decided to introduce a slimmed-down version that stripped them out, forcing lawmakers to vote on them as a stand-alone measure this week.

In order to speed the process along, the House on Thursday passed a bill extending the deadline to apply for unemployment insurance to April 5 and for COBRA benefits to March 28. That way, the Senate could have just approved the legislation and sent it directly to the president's desk.

However, Bunning's continued objection blocked Senate approval of the bill Friday.

This is not the first time unemployment insurance benefits -- which enjoy wide bipartisan support -- have fallen prey to politics. Last fall, the House approved adding up to 20 weeks to the federal benefits period. But it took seven weeks for the Senate to send it to the president's desk, during which time more than 200,000 people stopped receiving checks.

When lawmakers finally took up the measure, it passed by a 98-0 vote.

http://money.cnn.com/2010/02/26/news/ec ... insurance/

Jobless claims soar
By Chavon Sutton, staff reporterApril 8, 2010: 8:46 AM ET


NEW YORK (CNNMoney.com) -- The number of Americans filing for unemployment insurance for the first time jumped last week, according to government data released Thursday.

There were 460,000 initial jobless claims filed in the week ended April 3, up 18,000 from an upwardly revised 442,000 the previous week, according to the Labor Department's weekly report.

Economists surveyed by Briefing.com expected new claims to fall to 435,000 in the week. The number of new claims were just below the level reached in the Feb. 27 week, when initial claims totaled 466,000.

The Labor Department also tracks the 4-week moving average of initial claims, which smoothes out volatility in the measure. That number was 450,250 for the week, up 2,250 from the previous week's downwardly revised average of 448,000.

The report also said that 4,550,000 people filed continuing claims in the week ended March 20, the most recent data available. That figure, the lowest level since Dec. 20, 2008, was down 131,000 from the preceding week's 4,681,000 claims, and below the 4.63 million economists expected, according to Briefing.com.

The 4-week moving average for continuing claims was 4,648,250, a decrease of 36,000 from the preceding week's revised average of 4,684,250.

Continuing claims data exclude people whose benefits expired or those who have moved to state or federal extensions. It reflects those filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks.

http://money.cnn.com/2010/04/08/news/economy/initial_jobless_claims/index.htm?cnn=yes&hpt=T2

1.2 million households lost to recession
As friends and families double up, ‘overcrowding’ is up fivefold
By John W. Schoen
Senior producer
updated 8:28 a.m. CT, Thurs., April 8, 2010

Since Richard Brown lost his job to the recession and his Boston home to foreclosure a year ago, he’s been working short-term consulting assignments until he gets back on his feet. In the meantime, he’s been “couch surfing.”

“I’ve lived with my brother, my cousin, my friend and my dad,” he said. “The IRS keeps calling me, asking me: ‘What’s your address?’ And I say, ‘What week is this?’”

Brown represents one of the more than 1.2 million households lost to the recession, according to a report issued this week by the Mortgage Bankers Association that looked at data between 2005 and 2008. That number doesn’t include information from 2009, when job losses and foreclosures continued to rise.

So it's likely that the full impact of the 8.4 million jobs lost and nearly three million homes foreclosed on since the recession began has taken an even bigger toll on the number of American households.

“Given the depth of the downturn in 2009, and the ongoing weakness in the job market through the beginning of this year, this study gives no reason to expect that household formation has picked up at all," said Gary Painter, a professor at the University of Southern California who conducted the study.

The study also shed some light on what happens to the people in those "lost" households. It’s widely assumed that many who lose a home to foreclosure become renters. But since the recession began, there has been a five-fold increase in “overcrowding” of remaining households — defined as more than one person per room, according to the study.

That doubling-up is happening as families who lose their homes move in with friends or family. In other cases, younger people have delayed moving out on their own, instead staying with their parents until the economy improves. Others who fail to find work after graduating from college move back home.

Falling homeownership levels
The decline in households is weighing on both the home buying and rental markets. Since the number of home foreclosures began surging in 2007, the national homeownership rate has been steadily falling. But renters also have been forced to double up or move in with friends or family. That’s a major reason that the vacancy rate for U.S. apartments stood at 8 percent in the first quarter, the highest level since 1986, according to a report this week from Reis, a real estate research firm. In other words, we are losing the MIDDLE CLASS in this country. WAKE UP!!!

The future pace of household destruction or formation is uncertain. A lot depends on how quickly the job and housing markets recover. The outlook for both is mixed.

Though many economists expect the economy to add several hundred thousand new jobs a month as the recovery gains strength, it will likely take years to restore employment to its pre-recession levels. After the 2001 recession, it took four years of job growth to restore a 2 percent drop in employment. This time around employment levels have fallen by 6 percent.

Homeownership levels, meanwhile, continue to decline. New foreclosures filings are running about 300,000 a month, according to RealtyTrac. There are currently some 5 million homeowners that are 90 days or more past due on their mortgages, according to Fannie Mae chief economist Doug Duncan.

Though the pace of foreclosures has recently begun to taper off, there are indications they may pick up again as lenders redouble efforts to work out bad loans, and mortgage defaults continue to bring new foreclosures.

“Some of the foreclosure backlogs are working their way through the system at this point,” Duncan told CNBC.

Millions more homeowners who are current on their mortgages owe more than their home is worth. Though the government recently issued another round of guidelines to lenders urging them to reduce the principal owed on those loans, the process is mostly voluntary. These are the same ba$tard$ we BAILED OUT!

Rise in homelessness
So far, lenders have been slow to cut the size of a mortgage to make monthly payments more affordable. As a result, an increasing number of families are walking away from their homes in a process known in the industry as “strategic default.”

That can become contagious, said Duncan, as neighbors follow suit. “If they see someone else in their neighborhood that walks away, it increases the likelihood they will seriously consider not paying theirs,” he said.

It’s not a move to be taken lightly. The resulting damage to a borrower’s credit history can hurt job prospects with a new employer or create a barrier to renting.

In some cases, the loss of a house to foreclosure is leaving families homeless, though there is little national data available on how many are affected. A recent study by the Department of Housing and Urban Development found family homelessness on the rise since the recession began, with the biggest increases in suburban and rural areas.

Other groups, like the National Alliance to End Homelessness, report that a rising number of older adults are without a permanent place to live.

“The limited existing research tells a story of increasing homelessness among adults ages 50 and older,” the group said in a recent report.

The formation of new households isn’t expected to pick up again until at least 2012, according to the MBA study, even as the population continues to increase. Between 2005 and 2008, those 1.2 million households were lost even as the population grew by 3.4 million.

In the meantime, former homeowners like Brown are left scrambling for alternatives. He recently move into a rooming house where he continues to track down consulting work.

“I pay $600 for a third-floor room that gets hot in the summer,” he said. “It’s a blow. I don’t belong here. I’m an educated person. I’ve held executive positions. And here I am in a boarding house where Russian is a first language.”

[url]URL: http://www.msnbc.msn.com/id/36231884/ns ... e_economy/[/url]

Jobless Claims Increase

By SARAH N. LYNCH And TOM BARKLEY

In a troubling sign for the U.S. labor market, the number of workers filing new claims for unemployment benefits unexpectedly surged last week to wipe out most of the recent declines.

The Labor Department said in its weekly report Thursday that initial claims for jobless benefits rose by 25,000 to 471,000 in the week ended May 15. Economists who were surveyed by Dow Jones Newswires had predicted claims would fall by 4,000.

The previous week's level was revised upward as well, to 446,000 from 444,000.

The Labor Department's report on Thursday showed that the four-week moving average, which aims to smooth volatility in the data to help paint a better picture of the underlying trend, increased for the week ended May 15. The four-week moving average went up by 3,000 to 453,500 from the previous week's unrevised average of 450,500.

Total claims lasting more than one week, meanwhile, fell.

A Labor Department economist said on Thursday that this latest report is complete and no state data was estimated. Unlike the spikes in claims that occurred in early April due to seasonal and holiday factors, the economist said this time there's no indication that the increase is related to administrative factors. The spike in claims last week reversed most of the declines since April 10, when claims were at 480,000.

Claims have been among the most stubborn of all U.S. economic indicators, suggesting the job market will take a long time to recover. Although a recent Labor Department report showed that the U.S. economy created 290,000 jobs in the month of April, it also revealed that unemployment had risen to 9.9% as more workers decided to resume their job searches.

In the Labor Department's Thursday report, the number of continuing claims -- those drawn by workers for more than one week in the week ended May 8 -- fell by 40,000 to 4,625,000 from the preceding week's revised level of 4,665,000.

The unemployment rate for workers with unemployment insurance for the week ended May 8 was 3.6%, unchanged from the prior week's unrevised rate.

The largest increase in claims occurred in California, which saw claims rise by 8,351 in the week ended May 8 to due layoffs in the service and manufacturing sectors. Other states with increases included Michigan, New Jersey, Georgia and Puerto Rico. The largest decreases, meanwhile, occurred in New York, Kentucky, Connecticut, Missouri and New Hampshire.

http://online.wsj.com/article/SB10001424052748703559004575256112299027150.html?mod=WSJ_hps_LEFTWhatsNews

One of the candidates running for Gov in GA, Poythress is his name (sp) has an ad that says he will not take a salary until unemployment in GA is 7% or under.... I guess he will be living on his own dime. He's a former 3 star general also... we'll see how that goes for him...

Leo

The American Economy: Making Money By Keeping People Unemployed

Posted: June 28, 2010 at 6:09 am


The secret to the amazing increases in productivity in the American economy is finally out. Companies in the US are not hiring full-time workers. They are gambling that they can keep their margins high by keeping a vast part of the workforce, perhaps millions of people, unemployed.

Unemployed people, it turns out to no one’s surprise, will work for very little. And, they will work without benefits, without job security, and without complaint.

According to Bloomberg, “The 6.8 million Americans out of work for 27 weeks or longer — a record 46 percent of all the unemployed — are providing U.S. companies with an eager, skilled and cheap labor pool.”

The development is a revelation, and a good one, for companies, municipalities, and states, all of which are tight on cash and unable to get credit at reasonable rates if at all. The nearly 10% unemployment rate in the US is supposed to come down late this year and early next. This assumes that companies with improved prospects will hire full-time workers as they have for decades. These workers have had pensions, benefits, and vacations. That makes a person who makes $40,000 cost $50,000 or $60,000. Employers want to bring the effective cost of that same worker down to $35,000 or perhaps $30,000.

Even if a recovery in GDP means that the US produces more goods and services for the 84% of Americans with jobs or federal and state support and for exports to other nations, many of the companies that supply these things may not hire a single full-time worker. If that is true and becomes a substantial trend, then the point at which unemployment and underemployment will begin to become better may be many quarters, if not many decades, away.

Douglas A. McIntyre

http://247wallst.com/2010/06/28/the-american-economy-making-money-by-keeping-people-unemployed/#more-71942

http://www.google.com/hostednews/ap/article/ALeqM5hLKyB9H7lUpiALFVlU7RRJa9-EfwD9GM90T84

1.3 million unemployed won't get benefits restored

By STEPHEN OHLEMACHER (AP) – 52 minutes ago

WASHINGTON — More than 1.3 million laid-off workers won't get their unemployment benefits reinstated before Congress goes on a weeklong vacation for Independence Day.

An additional 200,000 people who have been without a job for at least six months stand to lose their benefits each week, unless Congress acts.

For the third time in as many weeks, Republicans in the Senate successfully filibustered a bill Wednesday night that would have continued unemployment checks to people who have been laid off for long stretches. The House is slated to vote on a similar measure Thursday, though the Senate's action renders the vote a futile gesture as Congress prepares to depart Washington for its holiday recess.

A little more than 1.3 million people have already lost benefits since the last extension ran out at the end of May.

"It is beyond disappointing that Republicans continue to stand almost lockstep against assistance for out-of-work Americans," said Senate Majority Leader Harry Reid, D-Nev.

The measure, however, stands a better chance of passing after a replacement is seated for Sen. Robert C. Byrd, D-W.Va., who died Monday. The measure fell two votes short of the 60 needed to advance Wednesday night, but only because Reid, a supporter of the bill, voted "nay" to take a procedural step that would allow for a revote.

"We will vote on this measure again once there is a replacement named for the late Sen. Byrd," Reid said.

Byrd's successor will be named by West Virginia Gov. Joe Manchin, a Democrat.

Unable to deliver more stimulus spending for President Barack Obama, Democrats in Congress had hoped to at least restore the jobless benefits. Obama has urged lawmakers to spend about $50 billion to help states pay for Medicaid programs and to avoid teacher layoffs, but Democrats in Congress have been unable to come up with the votes.

Many Democrats see state aid and unemployment benefits as insurance against the economy sliding back into recession. However, many Republicans and some Democrats worry about adding to the growing national debt.

Republicans offered to support the unemployment bill if it was paid for with unspent money from last year's massive economic recovery package. Democrats rejected the offer, saying the money was needed for jobs programs.

"The only reason the unemployment extension hasn't passed is because Democrats simply refuse to pass a bill that doesn't add to the debt," said Senate Republican leader Mitch McConnell of Kentucky.

Republicans, who have argued that the economic recovery package was a failure, say it included plenty of lawmakers' pet projects that could be cut to cover the $33.9 billion needed to pay for extended unemployment benefits.

Sen. George Voinovich, R-Ohio, said, "My concern is that the Democrats are more interested in having this issue to demagogue for political gamesmanship than they are in simply passing the benefits extension."

The unemployment bill would have provided up to a total of 99 weekly unemployment checks averaging $335 to people whose 26 weeks of state-paid benefits have run out. The benefits would be available through the end of November, at a cost of $33.9 billion. The money would be borrowed, adding to the budget deficit.