Foreclosures Contribute to Highest Job Cuts in 34 Years

As foreclosures continue to burden communities across the U.S., the nationwide unemployment rate reached its highest level of 6.7 percent in November. According to the Labor Department, there are already 10.3 million unemployed Americans, a couple of millions more than New York City’s population.

In November, employers cut 533,000 jobs, the highest number since 1974, as recession resulted from the subprime credit crisis in 2007 that also gave rise to the flood of foreclosed properties across the nation.

Economists, including Richard Yamarone of Argus Research in New York, predicted that the unemployment rate could surpass 8 percent in 2009. Just this week, major companies have announced job cuts, such as General Motors Corp. and Legg Mason Inc. Telecommunications giant AT&T has already announced its massive layoff of 12,000 workers.

Mortgage foreclosures have reached their highest level during the third quarter, according to the Mortgage Bankers Association. The association also expects that a total of 2.2 million homeowners will face foreclosure proceedings before the year ends.

With a job loss of 370,000 in November, the service industry had the biggest loss, accounting for 67 percent of the total job loss during the month. Manufacturing companies lost 85,000 while the construction industry lost 82,000 jobs.

Canada also cut nearly 71,000 jobs during the month of November, the highest loss in 26 years. The U.S. recession that resulted from the subprime credit crisis has adversely affected other countries’ economies, including its northern neighbor.

Intensely concerned about the nation’s unemployment and foreclosure problems, President-elect Barack Obama has promised to focus on the revival of the economy upon his assumption of the presidency in January 2009. It is expected that his economic stimulus plan will use not only the second half of the $700 billion foreclosure prevention package that was approved by Congress in October 2008, but also additional funding for unconventional strategies to revive the economy.

Related Posts:

• Presidential Hopeful Dismisses “Politics” in Housing Crisis
• 3 Other Factors Contributing to the Foreclosure Crisis
• Jobless Claims, Foreclosed Houses for Sale Keep Rising
• Three Ways to Fix Subprime Crisis
• Home Prices Still Declining

This entry was posted on Monday, December 15th, 2008 at 3:10 am and is filed under Foreclosures. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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