Nation Needs To Replace 6,955,000 Pre-Recession Jobs; 38,000 Created Last Month
At the rate of last month's dismal job creation, it will take more than 15 years for America to replace the 7 million jobs that vanished in this Great Recession. The awful new job numbers -- just 38,000 in May when economists say the country needs at least 244,000 new jobs per month if the United States is to ever climb out of its hole -- are the latest sign America is beginning a new brutal phase of the endless crisis.
Yesterday's home sales data shows that residential real estate values are back down to 2002 levels, a new low in a financial crisis that began with a crash in housing prices. The "downward spiral" has no apparent bottom, and the number of sales is also in rapid decline. It would take three years of steady sales just to clear out the current batch of 1.9 million foreclosures, although millions of new foreclosures are expected to swell this inventory well into 2015, as wages and employment are stagnant and more than 28% of mortgage holders are "underwater," owing more to lenders than the property is worth today.
U.S. stock-index futures added to their losses Wednesday after data on private-sector employment in May proved to be unexpectedly gloomy. ADP reported that U.S. companies added only 38,000 jobs last month, far below the gain of almost 175,000 expected by analysts.
“The economic numbers continue to disappoint, forcing economists to revise and change forecasts lower in the wake of what appears to be a significant slowdown,” said Kevin Giddis, managing director, fixed-income capital markets at Morgan Keegan.