What the Job Numbers Mean

By Robert Reich, Robert Reich's Blog

08 April 12

he economy added only 120,000 jobs in March - down from the rate of more than 200,000 in each of the preceding three months. The rate of unemployment dropped from 8.3 to 8.2 percent mainly because fewer people were searching for jobs - and that rate depends on how many people are actively looking.

It's way too early to conclude the jobs recovery is stalling, but there's reason for concern.

Remember: Consumer spending is 70 percent of the economy. Employers won't hire without enough sales to justify the additional hires. It's up to consumers to make it worth their while.

But real spending (adjusted to remove price changes) this year hasn't been going anywhere. It increased just .5 percent in February after an anemic .2 percent increase in January.

The reason consumers aren't spending more is they don't have the money. Personal income was up just .2 percent in February - barely enough to keep up with inflation. As a result, personal saving as a percent of disposable income tumbled to 3.7 percent in February from 4.3 percent in January.

Personal saving is now at its lowest level since March 2009.
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BofA Donates Then Demolishes Houses to Cut Glut of Foreclosures

Bank of America Corp. (BAC), faced with a glut of foreclosed and abandoned houses it can’t sell, has a new tool to get rid of the most decrepit ones: a bulldozer.

The biggest U.S. mortgage servicer will donate 100 foreclosed houses in the Cleveland area and in some cases contribute to their demolition in partnership with a local agency that manages blighted property. The bank has similar plans in Detroit and Chicago, with more cities to come, and Wells Fargo & Co. (WFC), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Fannie Mae are conducting or considering their own programs.

Disposing of repossessed homes is one of the biggest headaches for lenders in the U.S., where 1,679,125 houses, or one in every 77, were in some stage of foreclosure as of June, according to research firm RealtyTrac Inc. of Irvine, California. The prospect of those properties flooding the market has depressed prices and driven off buyers concerned that housing values will keep dropping.
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