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December 5th, 2008
05:10 PM ET

Economic snapshot

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/images/10/30/art.foreclosure.sign.jpg]Program Note: Be sure to tune in to watch Ali’s full report on the latest news on unemployment, the auto bailout, and the housing market tonight on AC360 at 10pm ET.

Ali Velshi | Bio

CNN Chief Business Correspondent

November Employment Report

Jobs losses have accelerated dramatically

  • November (-533,000) is the worst single month loss of jobs since 1974
    –  Economists has predicted that 320,000 jobs would be loss
  • Total loss for the first 11 months of 2008: 1.9 MILLION
    –  That’s an average of 172,000 jobs lost PER MONTH
  • Economists say that in a healthy economy, just to keep up with the growth in the working-age population, we need to ADD 100,000 to 150,000 jobs PER MONTH
    –  So, in a good year, we should add 1.2 MILLION to 1.8 MILLION jobs
    –  Keep in mind that Obama says that his stimulus plan will add 2.5 MILLION jobs by 2011

National Unemployment Rate

Increased from 6.5% to 6.7%

BUT, nearly 500,000 people LEFT the workforce (i.e. are not counted) because

  • Their unemployment benefits ran out
  • They have stopped looking for work
  • They have returned to school

Delinquencies and Foreclosures

  • 1.35 MILLION US homes are in foreclosure, which is 2.97% of all homes with mortgages
    –  A 76% increase over the same time last year
  • BUT, another 5.99% of mortgage-holders are late with their payments

That means almost 10% of all mortgages are being affected. This recession was triggered by the housing bubble, but the job losses mean that an increasing number of people – MANY OF WHOM ARE NOT SUB-PRIME – stand to lose their homes.


Filed under: 360° Radar • Ali Velshi • Economy • Housing Market • Unemployment
soundoff (33 Responses)
  1. Barbara Pollard

    Through all of the negotiations between Congress and the Big 3 automakers, so far I have not heard one word about the other 2 million people who have already lost their jobs. The people of this country have not seen any significant benefit from all of the money that has been handed out. Actually, it doesn't make much sense giving money to the automakers or the banks so they can make more cars that no one can afford to buy or give loans to people who may not be able to pay them back. In my opinion, the stimulus package should go directly to the people so they can start buying again. This would increase sales, increase orders to manufacturers, require putting employees back to work, people could pay their mortgages and their loans, thus effectively stimulating the economy. I am no mathmatician, however, I think that 700 billion dollars divided by each household in the United States equals a lot more than $600.

    December 6, 2008 at 10:29 am |
  2. Alex (Aliso Viejo)

    I believe the solution to get out of the recession is attacking 3 key factors: 1. Banks that includes toxic assets (the hosing bubble instigated the recession hence, we need to rectify the root cause) 2. Corporations or business including small businesses 3. American people. As for spending money, yes!! we need to spend money to get out of the bail-out and start a better and renewed America.

    I read about Dr. Shoustari's proposal which I think was well thought of. However, it is not only the economic crisis we are dealing with. Our national security is also in a balance. Money can be grown but security once breached will be harder to contain. I wonder if Dr. Shoustari have a solution for the dilemma.

    December 6, 2008 at 5:02 am |
  3. Nick

    You need to report the unemployment numbers correctly. You stated on the show that the numbers released are the worst in three decades.

    What needs to be analyzed is what the population was in 1978 and then compare it to the workforce demographic say 21-60. Then, compare it to the workforce population now in 2008 with the same demographics. As you will see, once you look at these numbers,The number of job losses is far worse than what has been reported.

    December 6, 2008 at 3:07 am |
  4. Linda

    I watched the senate hearings with the Big3, and all the comments about bad business plans, bad union contracts, bad decisions, no foresight to plan ahead and it finally hit me, the people being so critical of the big3 are the same people who haven't balanced a budget in forever, created record deficits and still spending, still giving themselves pay raises, doesn't getting a raise mean you are doing a good job, helping to make your company profitable. The patients are running the asylum. Talk about taxation without representation.

    December 6, 2008 at 1:59 am |
  5. Hammerit

    "but the job losses mean that an increasing number of people [...] stand to lose their homes."

    Not just that. In the worst case it also means that those of the newly unemployed who are sub-prime will most likely not be able to pay back in time. This will increase the losses of the financial sector even further eventually forcing the banks to make credits more expensive. This will most likely prevent some companies from getting the credits they needed leaving them with no choice but to lay even more people off to cut costs. And so the vicious circle goes on.

    December 5, 2008 at 10:34 pm |
  6. arak

    Why can't we take the bailout money all together and give it to all tax paying citizens. Those citizens each would get more than $100,000.00. It probally would cause some inflation but then people would buy cars and other industries would get benefit as well. The economy would rise again, people will be happy, and it will take care of the problems that effect our everday lives. 😀

    December 5, 2008 at 10:24 pm |
  7. MAG

    Stop whining. Americans have always been highly careless and spending excessively in unecessary things. I am totally opposed to use federal money to bail out Wall Street, banks, car manufacturting companies, people who can't pay their homes and who knows what else. I feel punished for always being controlled and modest at spending money and making careful choices – always required sacrifice. I refuse to contribute with even a penny to it. Shut up, stop complaining, be modest and work hard.

    December 5, 2008 at 10:24 pm |
  8. Babu

    I had bought a home worth $310k in an auction paying cash to help real-estate market and I spent $40k paying workers to fixing it, now when I went to banks for loan to buy few more foreclosure homes, no bank is able to give loan on my existing home. Financial institutions are in bad shape they are still not helping home owners like us.

    There are millions of job creators and foreclosure home buyers like me, the government should support people like us in creating more jobs and buying foreclosure homes instead of supporting 3 auto companies.

    I think Government should help home owner not auto industry.

    Babu
    Dallas, TX

    December 5, 2008 at 10:23 pm |
  9. Wesley Harlan in Dallas Tx.

    I know of someone,on the west coast,who had a 590k house with 1,200 something payment.And it worked,3 years later he owed like 630k on the house,and sold it for like 840k.But here in Tx the same house would sell for like 180k.So the west coast is dying,and Texas lives.

    December 5, 2008 at 8:56 pm |
  10. Gene Penszynski from Vermont

    I happen to be a liberal who listens to Rush Limbaugh sinply to hear how totally irrational and irresponsible the conservative view is. They kep harping constantly on this pie in teh sky nonsense about how all this misery that their 'Let the Markets Control Themsleves' philosophy has inspired is some how related to economic growth.

    Tjhey never ever mention Herbert Hoover as being one of them in terms of their economic philosophy and the massice government spending in both infratstructure projects and government funded World War II arms prioduction that funally got us out of it. They don't ever mention the war tax increases and the bond drives that finally funded it all.

    Instead they live in this dream world of "cutting taxes creates jobs" ......
    The factgs are that the jobs that are created by this arfe NOT created HERE !!!!!!!!!!!!!! They are cretesd in COMMUNIST China and SOCIALIST INDIA !!!!!!!!!! Not is 'CAPITALIST' America !!!!!!!!

    Wake Up America id your income is zero or very close to zero a 'tax cut' doesn't mean diddley. A 20 per cent cut of 0 is still 0 !!!!!!!!

    This is not going to inspire consumer spending nor is it going to inspire industrial expansion since the fat cats simpluy don't pour this money back into the U.S. economy. They pour it inot the COMMUNIST Chinese and teh SOCIALIST INDIAN economies.!!!!!

    December 5, 2008 at 8:23 pm |
  11. Annie Kate

    Its too bad Congress can't pass some emergency legislation to move the inauguration up to sometime in Late December. Tennessee did that years ago for one gubernatorial election when the out-going governor was found guilty of corruption and bribery and they wanted to get the in-coming governor in before the out-going governor could pardon himself and all his buddies – at least I think that is how it went. Senator Lamar Alexander of TN would know – he was the incoming Governor that got sworn in early at that time. If Congress did it for this President he could get started now on his plans and proposals.

    December 5, 2008 at 8:14 pm |
  12. Angel

    I can't believe we're making such a fuss about lending money to the big 3, when we bailed out the banking industry for 10x more. And THEIR the ones who started this whole economy downspiral mess in the first place. If anything, i think aig and bears and all other investment firms should buy into the big 3 stocks & bonds along with the major oil corporations. All the hungry greedy dirty rottin scoundrels that make the most money in this country can help themselves...and stop taking money from my $400 paycheck.

    December 5, 2008 at 8:04 pm |
  13. Joanne, Solvay, NY

    It's important to remember the unemployment rate does not reflect those who have exhausted benefits ... and exhausted hope of employment!

    December 5, 2008 at 8:00 pm |
  14. Babak Shoushtari, DMD

    Dear AC 360

    I am writing you this letter because everyday I see the condition of our economy deteriorating and its seems that something drastic has to be done. I, like many others, believe that the root cause of our financial mess is the housing crisis.

    I have a solution to our housing crisis that can resolve it without increasing the national debt and borrowing from foreign governments. I am writing you, many other members of the media, and many members of Congress and the new Obama administration about my solution, hoping that one of you will first read my letter, second think about, and then lead an effort to modify if necessary and implement it and get us out of the mess we are in. I, myself, am a naturalized US citizen who immigrated to this country more than 22 years. I have been very blessed and grateful for all that this country has offered me. I graduated with honors from Harvard School of Dental Medicine and am a practicing Endodontist in La Jolla.

    What Americans and US politicians don’t realize is that the best thing America has going for it is being America. People from ALL over the world would love to live in America. The problem is that it is very difficult to immigrate to America. My proposal involves making that easier for people who are willing to invest in real-estate here. Individuals or families would have to invest a total of 1 million dollars, a minimum of $500,000 in real-estate and the balance in five year or longer T-Bills or CDs in American Banks. In return, they would get a provisional five year permanent residency, and after five years if they have maintained the above criteria would get full permanent residence (not Citizenship). At that time they can apply for citizenship.

    This is different than the existing investment residence and visas that are offered. People would actually buy a home, that they can live in or rent thus reducing the number of foreclosures and stabilizing prices and would place in US bank or Treasury, thus increasing liquidity. There are millions of people around the world that would apply for such a program so we have to figure out a number that would eliminate the foreclosure crisis and bring the housing market back to a healthy state. The number would probably be in the millions. If such a program were to be implemented, just the psychological effect that millions of wealthy foreigners will be lining up to buy American homes, will have an immediate positive effect.

    Why not allow rich foreigners who love the idea of America and living in America to invest here instead of increasing the debt and borrowing from foreign governments.

    Unfortunately I am not a politician or in the media so my hope is that someone will spread and promote this idea and make changes to so it will work.

    I thank you for reading this blog. God bless America!

    December 5, 2008 at 7:55 pm |
  15. Elizabeth

    Republicans are criticizing Obama for not taking a more active role given the state of the economy and the country. Why don't they push George Bush to continue working? He is still the president. The country is going to hell in a handbasket and he's acting like his work is done. He still has anobligation to run the country. He is shirking that duty, and lame duck or not, given the current situation he sould be working. If not then he should just leave office right now!!!! There must be something in the law that prohibits "derelection of duty" for a president.
    Elizabeth in SF

    December 5, 2008 at 6:57 pm |
  16. Janet A

    Okay born and raised in Metro Detroit for almost 40 years gives me some credence to say something here.
    First, yes we have to give the Big 3 some loans; we did for other companies who did not have the best record in running their companies?
    But we need ta tackle the mortgage mess after this mess is settled: wasn't that what kind of started this hole mess in the first place?
    I agree that any auto worker (or any one else's company) making over a certain amount should take a percentage pay cut.
    Having a Federal official or a committee watching over them? Sure, why not become even more socialized since we are giving them our money!
    But Even after we prop the Big 3 up; Who is going to afford to buy a new car? Who is going to be able to get a loan?
    Plus, since gas prices are low again: Are consumers going to continue to buy big SUV's, Trucks, and Mini-Vans?
    We need to develop some type of incentive for people to purchase new, American, gas saving, Autos. Just like the Federal Gvmnt. offered tax rebates for weather proofing our homes; How about the same for purchasing gas saving autos?

    December 5, 2008 at 6:55 pm |
  17. Ray Evelyn Russell

    Dear Anderson Cooper,
    Love your show. What I want to know is since the government is bailing all these big company's out with our money (tax payers), I think I have a right to ask them to bail me out . I don't need the billions they are asking for. I can also tell them where the money would go.
    Anderson tell the President to bail me out in the next few months. I will not come back and ask for more money after my bail out.
    Since all these big company's are jumping on the wagon, and can't say what they will spend our money on , they would not have that big problem with me explaining what I would do with it.
    Anderson, When America took GOD out of everything and tried to take over his world and run it their way, that is when their trouble started. GOD is just letting all of us know that we have to live the way he taught us over 2000 years. We have got to get back to GOD, he did not leave us we left him.
    So before anymore big company's get on the wagon, let them know that I am next in line.
    Keep up the good work Mr. Cooper, YOU ROCK!!!!!!!!!!!!

    Your Biggest Fan,
    Mrs. Ray E. Russell

    December 5, 2008 at 6:44 pm |
  18. Marcia, Warren MI

    Finally someone has wised up and stated what we in Michigan new all along:

    nearly 500,000 people LEFT the workforce (i.e. are not counted) because

    * Their unemployment benefits ran out

    December 5, 2008 at 6:36 pm |
  19. Doug Priest

    With their millions of dollars in quarterly profits, why not let the oil companies bail out the automobile makers. They are the ones who will profit from more cars on the road.

    December 5, 2008 at 6:24 pm |
  20. Gagan Bhatnagar

    Hello Anderson,

    I love your show, especially the part about Keeping Them Honest.

    GM, Ford & Chrysler have unions. How does that work.
    Do the workers at the factories still get a paycheck every month from the union fund even if the companies go under?

    Thanks,

    Gagan Bhatnagar

    December 5, 2008 at 6:08 pm |
  21. William of Iowa

    Keep people in their homes! Enough – it is time for Americans being foreclosed upon and evicted to fight back. The reasons, corporate and individual, are manifestations of greed. Our elected representatives have appropriated $700 billion and choose to work from the top down. Trickle up economics is required and now is the time to send a message to Uncle Sam, I am not leaving my home. You will have to drag me out kicking and screaming. And for journalists, print, television etc... Step up and cover, your attention is required for the people's success.

    December 5, 2008 at 6:06 pm |
  22. FG-San Francisco

    How did the auto executives come up with a plan to transform their respective companies in one week?? If they were such geniuses, then how did they get here at the first place?
    I say chapter 11 with a 100% pay for employees earning $80k or less and a sliding scale for other income levels until a viable plan is approved.

    December 5, 2008 at 6:01 pm |
  23. earle,woodstock,vt

    The economists were off by 200k plus (lost jobs), tells me to stop listening to these fools! The economist tell us we must add 100k-150k jobs/monthly to the economy to remain healthy. We currently have a population of approximately 310 million people,with the average family having one/two children at the most,however this excludes the Hispanic population(please take no offense), therefore I believe these fools are off by 25/35% with their predictions.The economist blame the housing bubble for the current recession,but I beg to differ. Never has a country gone to War without raising taxes to finance it, period! Bush's first Treasury Secretary Paul O'Neill (a geart economist whom I admire for speaking the truth, was also shown the door,Mr. Lawrence Lindsey) was fired for that belief (Mr.Cheney said bluntly,don't worry about raising taxes,because your not) and ushered in Mr.Snow,Wow! Now you do the math@ $10Billion/month for six plus years is approximately $3/4 Trillion Dollars. So my argument or rebuttal to these economist(actuaries) is it's the unfunded wars that put us where we are,...

    December 5, 2008 at 5:56 pm |
  24. John Wietfeldt

    Maybe the big three should become the Big One. In the beginning they were their own competition, but now, in a world economy there has risen other, more formidable competition.

    Look around the US and you will see foreign vehicles everywhere, but go to Europe or Japan and see how many US cars there are. They have effectively eliminated themselves from the world market.

    If they want to survive then they better start working together as The American Car Company.

    December 5, 2008 at 5:55 pm |
  25. Mike (Rockaway NJ)

    We hear all of this, along with several news reporters stating that the worst is not yet over... When is it going to end? Something needs to be done now! America can't wait nor afford another 40+ days for a new President to lead us in a new direction.Then again, maybe we wouldn't be so far in debt if we weren't paying for a war in Iraq where there are no weapons of mass destruction. That war is a cheap cover up that has steered our attention away from Osama Bin Laden and his terrorist network. If we found Saddam in a hole, we can should have found Bin Laden by now!

    December 5, 2008 at 5:43 pm |
  26. Matthew- Ithaca NY

    I can not believe our government is still waisting their time on the American Auto industry, which has not even tried to help it self yet! Home owners need the help first. People need a place to live before they need an over priced American car. If the big three are so close on cash then they should take Honda’s example and stop spending the millions, possibly billions that they put into motorsports each year. It has angered me that this fact on their bad spending habits has been ignored. Lets see an effort from the big 3 to help them self right now. Keep people in their homes!

    December 5, 2008 at 5:41 pm |
  27. JC- Los Angeles

    The horrid state of our nation is not a result of a housing bubble but rather a colossal lack of oversight and leadership at all levels of government and industry.

    Our leaders failed to enact a system of checks and balances which allowed fraud to flourish and contagion to spread to all industries with real estate lending being the most visible.

    Unless measures are put in place that require transparency and accountability, the fraudsters will simply move on to universal healthcare fraud and we will once again blame the effect rather than the cause.

    December 5, 2008 at 5:39 pm |
  28. Melissa, Los Angeles

    Unfortunately the sub-prime mortgages have lead the responsible into a possibility they will lose their homes due to job losses. Amazing how greed affects everyone.

    December 5, 2008 at 5:20 pm |