Friday, April 3, 2009

US Jobless data affecting economy:

According to the recent update, number of late payments of home equity loans has increased tremendously in US, in the last quarter of the year 2008. The main reason being the rising number of job losses. It proved to be a severe shock for the economy, and thus deepening the effect of recession on the borrowers.

Statistics have shown that the number of jobless claims filed in the US unexpectedly rose to a record breaking 8.1% in February, the highest since May 1983. This is avoiding the consumers from keeping up with the loan payments. Even more, economists are also forecasting that the unemployment rate may increase to 8.5%. All these are leading to the rise of loan delinquencies.

The graph below shows the number of Americans receiving jobless claims and also the recession period in this duration.

If we go with the figures by the Labor Department, as released on Thursday morning, the number of new claims for jobless benefits for the last week rose to 669,000 from previous week's 657,000. Together with that, those who were already receiving benefits hit a 10th straight record-high.

US economy has shed millions of jobs and is still continuing to do so to reduce the headcounts in numerous firms such that costs are lowered. This in turn is affecting the home owners, who are unable to pay their monthly loan amount.

The jobless data has been one of the most important that is affecting the economy and further pushing economy in recession. Though there is a glimpse of improvement, but nothing can be said now. Let's hope the financial condition improves fast as the time goes by.

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