It Certainly Feels Like a Recession....Economic Snapshot for June 2008

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from the Center for American Progress:



By Christian E. Weller | June 17, 2008




The Bush administration may not be calling it a recession, but it certainly feels like one for many American families. Job losses are mounting, wages are flat, and prices for large necessities are up, all while families struggle with record amounts of debt. In this stagflationary environment, more and more families are succumbing to the pressures and declaring bankruptcy and defaulting on their loans.

Easing the burden on families will not be easy since the original economic imbalances still loom large. Massive trade deficits are draining our national resources, innovation is low, and long-term budget deficits due to tax cuts for the rich pose obstacles to real solutions for America’s families.

1. Job losses mount. Employment declined by 49,000 jobs in May 2008—the fifth decline in a row—for a total loss of 324,000 during those months. Average monthly job growth was only 19,700 jobs over the past 12 months, compared to 141,800 jobs in the previous 12 months, and 208,600 jobs in the 12 months before that.

2. The threat of unemployment looms. In May 2008, the unemployment rate rose to 5.5%—the highest level since October 2004. The African-American unemployment rate rose in May 2008 to 9.7%, the Hispanic unemployment rate to 6.9%, and the white unemployment rate to 4.9%.

3. Wages remain flat. Factoring in inflation, hourly wages were only 2.1% higher and weekly wages were only 1.0% higher in April 2008 than in March 2001.

4. Fewer people have pensions and health insurance. The share of private sector workers with a pension dropped from 50.3% in 2000 to 43.2% in 2006, and the share of people with employer-provided health insurance dropped from 64.2% to 59.7%.

5. Family debt remains high. Household debt averaged 132.4% of disposable income in the first quarter of 2008, down from a record high of 133.5% in the previous quarter, but higher than at any point prior to the second quarter of 2007.

6. The housing crisis deepens. New home sales in April 2008 were 42.0% lower than a year earlier, and existing home sales were 17.5% lower. The average monthly supply of homes for the six months ending in October was 10.1 months, the highest since the U.S. Census started to report residential sales in 1967. ......(more)

The complete piece is at: http://www.americanprogress.org/issues/2008/06/econ_snapshot.html