More Unemployed, More Bank Foreclosed Home
A report published by the U.S. Bureau of Labor Statistics showed a looming disaster in the labor market that could cross over to the housing market and cause the bank foreclosed home rate to peak again.
June data showed that there were 14.7 million people in the country who are currently jobless, pushing the unemployment rate to 9.5 percent. Since the economic downturn started in the last quarter of 2007, the number of unemployed people has been increasing consistently, reaching 7.2 million, with the unemployment rate rising by 4.6 percent.
And as the unemployment rate continue to rise, the bank foreclosed home rate also increases. The first half of this year saw almost 1.9 million filings of foreclosures on over 1.5 million properties, a 9 percent rise from the previous six months.
In June, filings for bank foreclosed home were reported on 336,173 properties, which help boost the foreclosure rate in the second quarter of this year.
Leading the unemployment rate ranking are African Americans with 14.7 percent, followed by Latinos with 12.2 percent. The number of part-time workers in the country also rose to 9 million from 4.4 million in 207.
The U.S. Federal Reserve predicts that the unemployment rate nationwide will go beyond 10 percent by the end of 2009. Based on this prognosis, the agency warned that the country’s economy will continue to languish for another five years.
A look at several states nationwide showed that Michigan leads in the jobless rate, surpassing 15 percent. Other states with unemployment over 10 percent are California, Alabama, Georgia, Louisiana, Florida, Nevada, North Carolina, Oregon, Ohio, Indiana, Rhode Island, Tennessee and South Carolina and Illinois.
Despite these disconcerting numbers and bleak prognosis, Lawrence Summer, a top economic adviser under the Obama Administration, is optimistic about the whole economic picture. He believed that the government’s economic stimulus plan is on the right track and had helped prevent an economic collapse.
The stimulus plan involved injecting $787 billion into the country’s economy from 2009 to 2010 to boost its recovery. Included in the plan is the Home Affordable Program which aims to help about 7 to 9 million distressed homeowners avoid bank foreclosed home by reducing their interest rates or outstanding loan principal.
