Economics USA: Half a million lost jobs in November 2008

In what seems to be the largest figure for job losses since the Seventies among American workers --533,000 across the month of November -- translates to an unemployment rate of 6.7% of the workforce.

This month, the figure and rate will probably rise (at least marginally). Were that not sufficient a problem in itself, we must also keep in mind that people going thru job loss are likely to be "the lowly borrower at risk of foreclosure" as well. Christian Science Monitor's Mark Trumbull article "Housing: the key to economic survival" (Dec12,2k8) lays out the landscape:

The problem reached a stark milestone last week, as the Mortgage Bankers Association reported that 1 in 10 mortgage holders is either in foreclosure or at least a month late on payments.

President-elect Obama, the Democratic-controlled Congress, and the independent Federal Reserve are all considering new ways to stabilize the housing market.

But attention has already turned away from the loan defaulters, especially those trying to keep up with their monthly payments (mortgaged home-owners), political attention re-focusing itself on a bailout of the "Big Three" American-owned automakers. The specific kind of jeopardy that goes with a jobless worker losing a house, is not identical to that of an autoworker losing a job but getting bailed out in some fashion or other (compensation for early retirement and other schemes to reduce the workforce of Ford, General Motors, and Chrysler).

A few days earlier, "Ouch! Borrowers Keep Defaulting After Mortgage Modification" by John Carney (Dec8,2k8, ClusterStock via Yahoo! Finance) reports:

36% of borrowers who had their loans modified in the first two quarters of 2008 re-defaulted after just 3 months. After six months, the redefault rate was roughly 56%. After eight months, 58% of borrowers re-defaulted.

These three inter-related trends are not going to reverse themselves, or shift into reversal as a result of government action in the short run.

Economix