Friday, December 5, 2008

America is paying the price

The Bush administration has almost certainly presided over the most egregious run of mis-governance and bad government especially the policies on economy as it resulted the economy tipped into deep recession.

The unemployment rate rose to a 15-year high of 6.7% from 6.5% in October in the world's largest economy. Payrolls were cut by 533,000, much worse than the forecast for a reduction of 340,000 jobs as weakening consumer and business demand prompted companies to cut jobs to reduce costs.

Dramatically, it’s very clear that the US is in a pretty deep recession as the figures showed the employment market is deteriorating at an alarmingly rapid pace. Its economy suffered the worst monthly job losses since 1974; employers shed, underscoring the depth of the global financial crisis which prompted a slew of interest rate cuts worldwide.

President-elect Barack Obama said each of the job losses represent a "personal crisis" for an American family.

Subprime mortgages were one of the biggest root causes of the financial crisis and unemployment, with 20 percent of those mortgages in delinquency. It further push the Big Three, General Motors, Chrysler and Ford appear before Congress to appeal for federal aid.

Companies are cutting jobs to maintain profits or minimize losses at a time when consumer demand is abruptly drying up and banks are tightening lending standards.

Job losses will exacerbate mortgage delinquencies and foreclosures in the near future. The dollar fell against major currencies, and US light crude dived $1.31 to $42.31 a barrel after the November jobless figures were unveiled. It sinks further to $40.81 a barrel on the New York Mercantile Exchange.

The number of job losses was the largest in 34 years and much higher than the 325,000 expected by private forecasters, suggesting the recession in the world's largest economy would be longer and deeper than feared.

The worsening situation in the economy were widespread, hitting factories, building companies, financial firms, retailers, leisure and hospitality and other industries. Employers are slashing costs to the bone as they try to cope with falling demand. The few places where gains were logged included the government, education and health services.

America is paying the price, how about the rest of the world?

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