Jobless Rate Expected To Inch Higher In August
ARI SHAPIRO, host:
Economists often say jobs are the last thing to recover in a recession. Today, they'll get more data to consider. The Labor Department will release the August unemployment figures in its latest jobs report. NPR's Chris Arnold has been covering the economy throughout this recession and he joins us now on the line. Morning, Chris.
CHRIS ARNOLD: Good morning, Ari.
SHAPIRO: So, lately it looks like the jobs numbers have been getting a little bit better. Do you think that's likely to continue today? What do you expect to see?
ARNOLD: Well, we're hoping that continues. I mean, yeah, the jobs report is basically like a giant barometer, so it's, you know, a weather gauge predicting where the economy is headed. And back last winter and into the spring, we were losing an average of more than 600,000 jobs every single month. And that was very, very bad, clearly.
And this past time around in July, we lost 247,000 jobs. So, we're still losing jobs but that's a lot less. And this time around it's about what we're expecting - 250,000 jobs lost. So, that's a lot less bad and we're hoping to see that trend continue.
And the hope is that companies have sort of trimmed to the bone already and there's just not that much more to cut and that they can go forward and remain profitable, even, you know, with the shaky economy that we're in. And if that's the case, if we keep losing less jobs, again, that's good, because the economy just can't recover when it's losing a ton of jobs.
SHAPIRO: Because, I guess, the fear is if people lose their jobs, or they're afraid of losing jobs, they're not going to spend money and so the economy won't bounce back as quickly.
ARNOLD: Right. I mean, you know, there's the people who actually lose their job and they just, they don't have as much money to spend. But then, you know, if people all around you are losing their jobs - your friends and people you talk to - and it, like, affects the psychology of the entire country.
So, you know, yeah, people, maybe they won't take a vacation or they won't buy a car. And that gets into what we call sort of a vicious cycle in the economy, where, you know, people are worried because the economy's bad and then the economy gets worse because people are worried and they're not spending money. So, we want to see that improve.
Also, more job-losses results in more foreclosures. And, you know, there's all these people who have been losing their homes. And we're on track to see two million foreclosures this year, and that's the highest number ever in the post-war period.
SHAPIRO: This foreclosure crisis was sparked by all of those subprime loans, those bad loans. Is that still what we're seeing spinning out here as this foreclosure crisis continues?
ARNOLD: Well, that's still a part of it, but, you know, this really used to be a subprime loan problem. And, you know, these people with shaky credit - a lot of them, not everybody - but, you know, who got into these loans where the payments went way up, and a lot of these loans were kind of crazy.
But what's been happening lately is that we're seeing many more mainstream middle-class Americans in much more traditional loans - I mean, about a third of foreclosures now involve people who are prime borrowers in fixed-rate loans. And a lot of them are in trouble because they've lost their job or they're just making less money.
SHAPIRO: So, Chris, as you describe it, although we're looking for this jobs report today, it sounds as though the jobs, the consumer spending, the foreclosure crisis are all knit up in each other and there's no real way to separate them out.
ARNOLD: Yeah, I mean, you know, the economy is a giant web and everything's interconnected. And, you know, and this time around it's been a pretty nasty recession. I mean, you know, the percentage of people who've been out of work for more than six months is at its highest level in more than 50 years.
So, people have been out of work a long time, they've burned through savings that they have and stuff. So, in that sense it's very tough. And people have seen their hours cut back very sharply. We're down to 33 hours in the average workweek now.
And that is a key number in this report - hours worked - because employers just won't be hiring much until that number gets better if, you know, you've got your workforce at 33 hours a week, you don't need to run out and hire anybody else.
SHAPIRO: Thanks. That's NPR's Chris Arnold.
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