Record Foreclosures, Sharp Rise in Unemployment

123jump.com Staff
05 Dec, 2008
New York City

U.S. stocks dropped after the November employment report showed 533,000 jobs were eliminated. The rate of job loss was the highest since 1974. Mortgage delinquencies and foreclosure rates rose to the record level in 30 years. Insurance stocks led gainers and energy stocks led decliners in S&P 500.

[R]11:10 AM New York – Mortgage delinquencies rose to a record level in 30 years. In November 533,000 people lost their jobs, the fastest pace in 34 years.[/R]

Stocks in early trading fell on the sharply higher unemployment in November. Of the stocks in S&P 500 index, 444 stocks declined and 50 rose.

Chesapeake Energy led decliners in the index with a loss of 13.6% followed by losses in Southwestern Energy of 11.8%, in XTO Energy of 11.6%, in Range Resources of 10%.

Insurance companies led gainers in the S&P 500 index. Hartford Financial Services led gainers with a rise of 43% followed by gains in Prudential Financial of 8.6%, in Brown Forman of 7.8% and in MetLife of 7.5%. Banks rose after dropping in the early trading.

November unemployment rose 533,000 in the U.S. after dropping 403,000 in October and 320,000 in September. The number of unemployed persons rose to 10.3 million and unemployment rate increased to 6.7% from 6.5%.

The job cuts in November are the largest since 1974.

Total of 1.9 million people have lost their jobs since December 2007 and nearly 66% of these jobs were lost in the last three months.

In the month, construction jobs fell 82,000, retail jobs declined 91,000, leisure and hospitality jobs shrank 76,000, however healthcare employment jobs rose 34,000. Healthcare sector hired 369,000 people in the last one year.

In the third quarter mortgage delinquencies that are past 30 days rose to 7% and foreclosure rate rose to 2.97% in the period according to the Mortgage Bankers Association. The record rates of delinquencies are highest in nearly 30 years that the quarterly survey is conducted.

The seasonally adjusted delinquency rate increased 41 basis points to 4.34 percent for prime loans, increased 136 basis points to 20.03 percent for subprime loans, increased 29 basis points to 12.92 percent for FHA loans, and increased 46 basis points to 7.28 percent for VA loans.