Unemployment Approaches 10%; Foreclosures Likely to Continue
Image by nuttyxander via Flickr
Today, the government released its non-farm payrolls unemployment report. The news, as expected, remains somewhat grim: The unemployment rate in June reached 9.5%. This is slightly better than the anticipated 9.6% unemployment rate.
The fact that things aren’t quite as bad as analysts expect offers cold comfort. Sure, the rate of rising unemployment is slowing, but employment is still declining. And things aren’t likely to improve soon. The Street reports on companies that have announced pending job cuts:
Yesterday, Gannet(GCI Quote), which publishes USA Today, said it plans to cut 1,400 jobs or 3% of its work force.
Last week, Kimberly-Clark(KMB Quote) said it would lay off 1,600 workers, while Monsanto(MON Quote) said it would cut 900 jobs .
General Motors(GMGMQ Quote) also adjusted its domestic, white-collar, job cuts forecast up to 4,000.
Clearly, the coming weeks will see an increase in unemployment as more people lose their jobs and line up to collect government benefits. All of this unemployment is also going to have an effect on the housing market.
Prime foreclosures likely to continue to increase
When people do not have jobs, they find it difficult to make mortgage payments. Unemployment benefits can’t completely replace an income, and the last few years have left many people bereft of emergency savings funds. This means that foreclosures are likely to rise as conditions continue to worsen (albeit at a slower pace) on the employment front. With expectations that the unemployment rate will actually hit 10% before economic recovery begins, more foreclosures seem inevitable. The President’s foreclosure prevention plan, while admirable and likely to be helpful in some cases, can’t help those who don’t have an income to aid them in qualifying for loan modification or refinance.
In the end, it is a wise idea to prepare yourself for unemployment now. And realize that you will have to make changes to your finances and your life for this possibility. It may not happen, but if you cut expenses now and work on building your emergency fund, you will be prepared in the even that you are laid off. And if your job survives this recession? Well, making better personal finance decisions will always get you ahead — no matter what the economy is doing.
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July 2nd, 2009 at 10:27 am
[…] investors for today’s news, it still remains an unpleasant reality. Even the fact that unemployment is now sitting at 9.5%, instead of the expected 9.6%, is providing little in the way of hope. The bears are out for […]