Unemployment figures suggest workers' debt management woes could ease

10.17.09
By Nicholas Storie

Unemployed Americans may be on the verge of getting some relief with their debt management problems now that the jobs situation seems to be improving.

This week, the Department of Labor reported that 514,000 Americans filed for first time unemployment benefits last week. While still high, the figure is 10,000 lower than the 524,000 recorded last week and appears to be part of an emerging trend towards fewer job losses.

At the beginning of the week, the National Association of Business Economists announced that the recession is already over, even though it remains to be seen how strong any ensuing recovery will be. The NABE survey involved 44 economists, 80 percent of whom believe that the recession has now passed.

Still, economists have widely predicted that the nation's unemployment rate will rise to above 10 percent by next year before leveling back off in 2011. Some states are also prone to far worse problems with joblessness at this point. For example, Michigan's unemployment rate currently stands at above 15 percent in part because of ongoing losses in the manufacturing and automotive sectors.

Real estate will also be key to the strength of any economic recovery in the coming months, particularly the area of home sales.

The real estate industry is widely expecting to see a spike in foreclosures in the coming months before the market fully recovers, in part because of current default rates and the ongoing upswing in the national unemployment rate.

Still, home sales themselves have been strong and the inventory of unsold properties has also been improving in recent weeks, allowing the market to feel some degree of optimism for the short term future. Overall, workers aren't out of the woods yet with debt management and other problems, but conditions are being set that appear favorable.

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Debt woes could be on the verge of improving for some Americans.