The Crisis Deepens

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The Lehmann Letter ©

This morning’s employment report from the Bureau of Labor Statistics is alarming (http://stats.bls.gov/news.release/empsit.nr0.htm):

“Nonfarm payroll employment fell sharply (-533,000) in November, and
the unemployment rate rose from 6.5 to 6.7 percent, the Bureau of Labor
Statistics of the U.S. Department of Labor reported today. November's
drop in payroll employment followed declines of 403,000 in September and
320,000 in October, as revised. Job losses were large and widespread
across the major industry sectors in November.”

November’s job loss – 533,000 – signals deep recession. So does the upward revision of the September and October figures to 403,000 and 320,000 respectively. Details of the report are equally grim. Only education and health services (+52,000) and government (+9,000) added jobs. All other sectors shed workers. The sharp drop in overall service employment (370,000) was especially eye-catching. This slump is not confined to construction and manufacturing.

When will the administration step in and stop the bleeding? A lower interest rate for home-buyers is good. A foreclosure moratorium for homeowners, together with a generous refinance package for those at risk of losing their homes, would be better. It’s hard to envision a successful recovery program that fails to include real-estate stabilization.

© 2008 Michael B. Lehmann