Today’s LA Times is confirming what most of us are painfully aware. Each day, as we try to survive, keeping a roof over our family’s head and food on the table. reports like this roll out of the nations capital.
Reporting from Washington — The nation’s unemployment rate soared to its highest level in 16 years last month, reaching an eye-popping 7.2% as businesses slashed their payrolls by 524,000 jobs in December, the government reported today.
All together, 2.6 million jobs were lost in 2008 — 75% of them in the last four months — and 11.1 million workers are now unemployed, the Labor Department said. And that’s not counting millions more who have reluctantly taken part-time work instead of full-time jobs or have become so discouraged they stopped looking for a new job.
This information does nothing for those of us who are affected by lower wages and lost jobs, we are living the ramifications daily. Good thing about getting it out and recognized is that if your a home owner, you have a much greater chance today, than you did 6 months ago, to avoid a foreclosure.
Banks are realizing that no matter if it’s a modified payment (Loan Modification) or a “Short Sale” they will take a much smaller loss than they have in the past with their over zellous, power plays of being unwilling to work with the seller. more from the same LA Times article:
In just the last four months, the economy has shed 1.9 million jobs. Just to keep pace with population growth, the economy needs to create about 100,000 jobs a month.
“We’re seeing a complete unraveling of the labor market and are on track for getting beyond 10% unemployment,” said Lawrence Mishel, president of the Economic Policy Institute in Washington.
The job losses were widespread, touching nearly every sector of the economy. Manufacturing payrolls, already shrinking for more than a year, posted their largest one-month decline since 2001. Construction firms also continued to shed workers, losing 899,000 jobs since the housing boom peaked in September 2006.
“There is no silver lining here,” said Alan Krueger, a professor of economics at Princeton University and a former chief economist for the Labor Department. “The only sectors that didn’t shrink are education, health care and government.”
“The jobs market is still in a free-fall,” Behravesh said.
Behravesh said he expects the jobs hemorrhage to continue through much of 2009.
“During the first few months, the magnitude of the job losses will be at least as large as the November and December drops,” he said in a note to his newsletter’s subscribers. “However, if a large fiscal stimulus package can be enacted quickly, then the pace of job losses in the second half of the year can be slowed and by early 2010 the prospects for the U.S. economy starting to create jobs again will be good.”
Morici said that without a massive government stimulus program, the economic downturn will last a very long time.
“This will prove to be a depression if we don’t act quickly,” Morici said. “The economy is not in a self-correcting mode. Recessions self-correct, but depressions do not.”
How do we deal with this outlook? Work with what you have. If your home is a “sinking ship”, jump overboard and get into a life boat that will stop you from drowning. You need to Short Sale the property to save yourself, your family and your credit.
If you want to keep your home, we can assist in a loan modification. Some lenders are more generous than others. We’ve seen revised terms of 10 years at 2.7% interest. Of course this is an interest only loan, but in 10 years a lot will have changed….
Same goes for those credit cards, car loans and other unsecured debt we’ve managed to accumulate. Start dialing and asking for a better interest rate and perhaps even a balance reduction. With so many people filing for bankruptcy….These entities are feeling the strain, something is better than nothing, right?
You will never know if you don’t ask!
