San Jose, CA – New economic data released in early January 2008 showed that the U.S. economy was on the edge of a recession in December. On Jan. 2, the Institute for Supply Management reported that the manufacturing sector shrank in December. Their index fell to 47.7 from 50.8 in November, the lowest level since April of 2003. Then on Jan. 4, the Department of Labor said that the unemployment rate rose to 5% in December, from 4.7% the month before, the biggest one-month jump since the last recession in 2001. In the same report, the Labor Department also said that only 18,000 new jobs were created in December, the weakest number since August of 2003.
San Jose, CA – On Dec. 6, the Mortgage Bankers Association of America reported that home foreclosures and late mortgages rose to record highs in the July to September period. The next day, Bush’s Treasury Secretary Paulson announced a plan to aid home-buyers. While consumer advocates criticized the plan for being too little, too late, Wall Street liked the plan, which would let banks off the hook, and sent stocks up.
San Jose, CA – On Sept. 18 the Federal Reserve cut two key short-term interest rates for bank loans by one-half a percentage point. These interest rate cuts followed on the heels of dismal economic data on jobs and the worsening housing and mortgage bust, as well as continued instability in financial markets. While stock markets around the world celebrated the larger-than-expected interest rate cuts with large increases, the Federal Reserve action reflects weakness, not strength, in the economy.
San Jose, CA – In July the U.S. housing market hit new lows, with the lowest number of permits for new homes and the lowest number of construction starts in more than ten years. Then in August financial markets across the globe were shaken by the growing defaults on mortgages in the United States.
San Jose, CA – Between September of 2005 and December of 2006 permits to build new homes went down 28%, as home sales have dropped and prices have started to fall. In the last 50 years there have been seven other declines in building permits of 25% or more, and every single one has been followed by a recession, the most recent being the 1990 recession.
San Jose, CA – According to a U.S. Census Bureau report released in October, the cost of renting rose even faster than the cost of buying a home between 2000 and 2005. Over those five years, rents rose 20.7% as compared to an 18.75% rise in homeowner costs (these are nationwide averages, the increases for both in some areas such as California have been much higher).
San Jose, CA – The official U.S. unemployment rate rose from 4.6% to 4.8% in July as the economic growth slowed over the past months, creating fewer jobs. The number of long-term (15 weeks or more) jobless people rose, as unemployed workers had a harder time finding new jobs. A better measure of unemployment, which includes workers who have to take part-time jobs because they can’t get full-time work, and those who temporarily gave up looking because they haven’t been able to find a job, also rose in July to 7.8%.
San Jose, CA – When the price of gasoline spiked above $3 per gallon, Republicans responded by proposing a $100 rebate. This was widely condemned as a public relations stunt at best and an insult at worst as working families are weighed down by high gas prices, rising interest rates and cuts in pensions and health care. But you don’t hear complaints about the Republicans coming from the rich.
San Jose, CA – Sales of existing homes slowed in January for the fifth month in a row, while inventories of unsold homes rose to levels not seen in years. The biggest drops took place in the hot markets of California, south Florida and Massachusetts, all of which saw sales of existing homes fall more than 20% from a year earlier.
