So it's more than half way through the year now. You might be wondering how things are looking in the economy. Last year, many had predicted that the downturn would continue through the first quarter of 2009, but then we'd start to see stabilization in the second quarter and maybe even a return to growth by the summer. Well, we're already into the third quarter, and a turnaround is still nowhere sight. The three major indicators of the economy's condition are the rates of unemployment, bankruptcy filings, and home foreclosures. Here's the rundown on those numbers, and it's not pretty.
The overall unemployment rate was 9.1 percent at the end of May. Earlier in the year, some economists expressed concern that the rate might surpass 10 percent in 2009; it looks like that's inevitable now. The unemployment rate in numerous states has already passed this benchmark figure. In fact, several states are now seeing record numbers of people without jobs. Michigan currently has an unemployment rate of 14.1 percent -“ the highest in the country, and the highest in that state since November 1982. South Carolina, Oregon, and Rhode Island are all dealing with a rate of 12.1 percent -“ the highest those states have ever seen. Other states seeing the highest unemployment percentages on record include California (11.5%), Nevada (11.3%), North Carolina (11.1%), and Georgia (9.7%).
With these sort of unemployment figures, it's not surprising that bankruptcy filings also continue to be on the rise. In May alone, the number of consumer filings averaged 6,020 per day; the average was 5,854 in April. The number of business filings was 7,514 -“ an increase of 40 percent over May of last year. Since the recession took hold 18 months ago, more than 100,000 businesses have been forced to seek bankruptcy protection. At the current pace of filings, the number of consumer and business bankruptcies could hit a total of 1.5 million this year -“ up 400,000 from last year's total of 1.1 million.
And then, of course, there's the dismal housing market. Most experts agree that a turnaround in the economy is not likely, or even possible, until the housing market stabilizes. For this to happen, the rate of new mortgage delinquencies must drop sharply and the market has to purge itself of the existing delinquent mortgages. But this just isn't happening.
As jobs disappear and ARM interest rates continue to reset, people continue to default on their mortgages. There's also a backlog of about one million seriously delinquent mortgages that banks haven't even dealt with yet. These days, lenders are dragging their feet for months and months before foreclosing on properties with seriously delinquent mortgages. This is partly because they're having trouble keeping up with the high volume of accounts in default. But it's also because they just don't want the properties back. Banks often have little incentive to move quickly in such cases. Foreclosure is a costly process that just brings the bank a big loss at the end of the day. But these delays will simply prolong the recovery of the housing market.
So the condition of the economy continues to look bleak, and the recovery seems further and further off in the future. If you're one of the countless Americans caught up in this turmoil, consider doing what millions before you have already done: filing bankruptcy. The bankruptcy laws were designed to help people bridge the gap in times like these. You can eliminate your unmanageable debts, take back control over your life, and make a fresh start.
In North Carolina, contact The Law Offices of John T. Orcutt, with convenient office locations in Raleigh, Durham, Fayetteville, and Wilson. Call (toll free) +1-919-646-2654, to set up a free, confidential debt consultation. Visit www.billsbills.com for more information.