Woohoo! The headlines say it all …
The Gallup survey listed above measures spending as reported by consumers. The overall trend for 2010 shows no real increase over 2009 and, as Ed Morrisey notes, may lead retailers to consider shedding jobs this fall. Right now there is certainly no incentive to hire additional workers.
Poor retail sales are probably a major contributing factor to record high youth unemployment, because retail sales associates are traditionally a very large portion of entry-level jobs. Actually high youth unemployment is a worldwide problem. Right now, worldwide unemployment for youth (presumably in developed nations) stands at around 12.9%.
We are also potentially looking at another slump in home values, as unemployment benefits, mortgage modification programs, and other life support for homeowners who can no longer afford their mortgage payments begins to run out, and more homes enter the foreclosure process. The Federal Government’s “Home Affordable Modification Program” has fizzled due to persistently high unemployment/lack of income, and the number of homes with mortgages that are now under water. Investment blogger Mike Shedlock recently noted:
Only 30% of the 5.7 million borrowers who are 60 days delinquent are eligible for the program. 4 million delinquent borrowers are stuck. Of those eligible for the program, only 346,000 have completed the trial and received a permanent modification.
Many of those receiving a permanent modification will slip back into default and head for foreclosure. Many of those who successfully keep their house would be better off if they lost it.
Looking at HAMP from every angle, it’s safe to say the program was a failure and another huge wave of foreclosures is coming down the road.
There are already an estimated 600,000 foreclosure properties up for sale nationwide, compared to the 564,000 total homes that were sold in June 2010, which was a record low for monthly home sales. The national average for foreclosure property sales is around 150,000 units per month. Experts also estimate that around 6 million mortgage holders are currently delinquent. The math doesn’t look good at all.
So much for President Obama’s “Recovery Summer.”
Today Rush Limbaugh asked, “What comes next? The Fall of America?”