The downward arc of the economy seems to have picked up speed in the month of February.
The BLS released a brutal set of February employment numbers this morning: 651,000 jobs lost, raising the unemployment rate half a point to 8.1 percent. That represents another acceleration in the rate of job market erosion. November through January figures saw net job losses in the 550-600,000 a month range. The number of “long-term unemployed” (27 weeks or more) rose to 2.9 million, or more than twice the 1.3 million who were in that position a year ago.
Some demographic information from the release:
“The unemployment rate continued to trend upward in February for adult men (8.1 percent), adult women (6.7 percent), whites (7.3 percent), blacks (13.4 percent), and Hispanics (10.9 percent). The jobless rate for teen-agers was little changed at 21.6 percent. The unemployment rate for Asians was 6.9 percent in February, not seasonally adjusted.”
The more expansive U6 figure (I’ve called it the “misery index”), which offers a snapshot of discouraged workers who’ve stopped actively seeking jobs and those who are working only part-time by necessity, rose nearly a full point to 14.8 percent of the workforce. Last month it was 13.9. A year ago it was 9.5.
Unemployment figures are not just the most closely economic indicator. In the words of UM economist C. Ford Runge, “Many indicators lead or lag developments in the economy, but the rate of job loss is a fairly good contemporaneous indicator of the performance of the economy.”
Here’s another alarming indicator that’s received far less attention than today’s unemployment announcement will get: Yesterday the Mortgage Bankers Association (MBA) reported that 11.93 percent of home mortgages in the United States are at least one payment behind or already in the foreclosure process. The foreclosure piece accounts for 3.3 percent of American mortgages, which means that nearly another 9 percent has fallen into arrears.
The Alt-As–mostly, adjustable-rate mortgages that are not subprime–are hitting the fan. But that’s not all. This from MBA chief economist Jay Brinkman (emphasis added):”The rate of new foreclosures has remained essentially flat for the last three quarters of 2008. This might be seen as a good sign for mortgage performance, but most other measures point to exactly the opposite conclusion. The percentage of loans 90 days or more past due jumped sharply in the fourth quarter. Normally servicers would have initiated foreclosure actions on a significant portion of these loans but delayed doing so for a variety of reasons, including working on loan modifications, complying with the guidelines of different investors, and various delays in different locales….
“Subprime ARM loans and prime ARM loans, which include Alt-A and pay option ARMs, continue to dominate the delinquency numbers. Nationwide, 48 percent of subprime ARMs were at least one payment past due and in Florida over 60 percent of subprime ARMs were at least one payment past due. We will continue to see, however, a shift away from delinquencies tied to the structure and underwriting quality of loans to mortgage delinquencies caused by job and income losses.“