Unemployment Continues To Rise
Latest available employment data from the Bureau of Labor Statistics show the nation’s nonfarm payroll employment declined by 159,000 in September and the unemployment rate held at 6.1 percent (9.5 million persons). Over the past 12 months, the number of unemployed persons has increased by 2.2 million and the unemployment rate has risen by 1.4 percentage points. Employment continued to fall in construction, manufacturing and the retail trade, while mining and healthcare continued to add jobs. In September, the number of long-term unemployed (those jobless for 27 weeks or more) rose by 167,000 to 2.0 million, an increase of 728,000 over the past 12 months.
Treasury Department Moves Forward on Bailout
A top Treasury official outlined the government’s multi-prong effort to bail out the financial system and resuscitate the economy. Using authority granted in the $700 billion rescue plan passed by Congress, the Treasury Department is:
• Purchasing troubled mortgage- backed securities;
• Buying mortgages, particularly from regional banks;
• Insuring mortgage-backed securities and mortgages, ensuring banks and investors don’t lose money if borrowers default;
• Purchasing equity in a broad array of financial institutions; and
• Helping delinquent borrowers stay in their homes.
Proposed Stimulus Package
The Federal Reserve Chairman Ben Bernanke gave testimony recently to the House Budget Committee on the state of the economy and indicated that a stimulus package of ‘significant’ size, directed at consumers and businesses access to credit, would be appropriate from Congress at this juncture citing concerns of a ‘protracted slowdown’. The Fed chairman also cited the deteriorating labor market, declines in consumer and business spending and a “depressed” housing market, but declined to say whether or not the country is in a recession. The White House has indicated that it is open to this idea dependent upon what type of legislation is crafted.