Economy Hasn't Hit Bottom, Yet
ANDREA SEABROOK, host:
From NPR News, it's All Things Considered. I'm Andrea Seabrook. Shockingly weak, truly horrific, indescribably terrible - that's how various economists described yesterday's unemployment numbers. They showed more than half a million American jobs lost in November alone. NPR's economics correspondent John Ydstie is here. And, John, is it really that bad?
JOHN YDSTIE: Well, it's pretty bad. 533,000 jobs lost, the worst numbers since 1974. And in addition, the labor department said that 200,000 more jobs were lost in September and October than had been previously reported.
SEABROOK: And that's just the headline here.
YDSTIE: That's just the headline. There are actually an additional group of people who work part time who want to get a full time job, or people who've looked for a job are discouraged now. They're not counted in the unemployment statistics. The number of people in those categories went up by a million people, more than a million people in November. And if you add them into the unemployment rate, we'd get a much higher rate than the 6.7 that was reported yesterday.
SEABROOK: So, is this the bottom, John? Let's hope so.
YDSTIE: Well, I don't think it is. Most forecasts suggest that the economy is going to continue to shrink quite rapidly into next year, maybe begin to recover toward the end of the year. And a lot of economists are predicting unemployment rising to eight percent. Some are now saying up to 10 percent, which would rival the very deep recession of the early 1980s.
SEABROOK: I understand there was a report out yesterday from the Mortgage Bankers Association that had this incredible statistic in it. It said one in 10 homeowners with mortgages are a month behind in payments or already in foreclosure.
YDSTIE: Yeah. That's a scary number. And I think it's likely to get worse as unemployment rises. Democrats continue to try to pressure the Bush administration to do more to help struggling homeowners. And there's some hope among Democrats that if the administration comes back to ask for the second half of this $700 billion TARP program, which it wants in case there are more failures in the financial industry, that the Congress will be able to force the administration to spend some of that money helping homeowners.
SEABROOK: Speaking of Congress, John, the last couple of days, the heads of the Big Three automakers have been before Congress begging for $34 billion from the federal government. Are they going to get anything close to that?
YDSTIE: Well, I think they're going to get some of it. I think the big job loss numbers in November kind of focused the Congress and the White House on the dire consequences of allowing the auto companies to fail. So, Congress and the White House have agreed now to write legislation over this weekend that could be voted on next week. The outlines suggest that the auto companies would get $15 to $17 billion to keep them operating through March, until the new president and the new Congress come in, and then they'll have to deal with the situation.
SEABROOK: So, about half of what they're asking...
YDSTIE: About half of what they're asking for...
SEABROOK: Get them into the new year.
YDSTIE: But there's still a question of whether the Congress will pass it. I mean, there's still a lot of opposition in Congress to this.
SEABROOK: NPR's John Ydstie. Thanks very much, John.
YDSTIE: You're very welcome.