Private Sector Lost 697,000 Jobs in Feb.A report from payroll company ADP shows the American economy lost another 697,000 jobs in February. This is an increase of 25 percent over the 522,000 jobs lost in January. But another report from outplacement firm Challenger, Gray & Christmas says job cut announcements have eased from a seven-year high.
The unemployment rate now is at 7.6 percent, but may rise above 8 percent a year from now. The report from Challenger, Gray & Christmas reported the number of planned job cuts announced in February fell for the first time since December. The firm says this offers some hope that January was the peak, and layoffs may begin to fall or stabilize.
The February totals were 158% higher than the 72,091 job cuts announced last February. In 2009 employers have already announced 428,099 job cuts, 191 percent higher than the 147,077 cuts in the first two months of 2008.
U.S. Homeowners: 1 in 5 Are "Underwater"
At least one in five U.S. homeowners now owe more on their homes than their properties are worth, says a new study. The rate is expected to increase as housing values drop in states that have thus far avoided the worst of the housing crisis.
Nearly 8.3 million homes had negative equity at the end of 2008, up 9 percent from 7.6 million at the end of September, says the report from First American CoreLogic. The percentage of "underwater" borrowers went from 18 percent up to 20 percent, and another 2.1 million properties could slip underwater if home prices fall another 5 percent. The study shows that the value of residential properties fell to $19.1 trillion at the end of the year from $21.5 trillion in 2007. Half of the decline came in California.
California, Florida and Nevada were under a great amount of stress; however the 43-state study shows more signs of deterioration in still healthy parts of the country.
Arizona, California, Florida, Georgia, Michigan, Nevada and Ohio still top the list with 62 percent of underwater borrowers and just 41 percent of mortgages. Other states are beginning to see the negative equity flux; Connecticut has a 25 percent increase in homes with negative equity, and Washington, D.C. saw a 44 percent increase.
Fed Program for Refinancing Mortgages Introduced
The Obama administration unveiled its new program to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments on Wednesday.
The Treasury Department has released detailed guidelines designed to let the lending industry know how to enroll borrowers in the program announced last month.
To help borrowers determine if they are eligible, the government has put answers to common questions and assessment tools on the Web site http://www.FinancialStability.gov.
Treasury Secretary Timothy Geithner says it is imperative that the government move with speed to make housing more affordable and stop the damage to the U.S. housing market.