WASHINGTON -- The Obama administration's inability to stem the foreclosure crisis ricocheted dramatically on Friday, as the Labor Department released unexpectedly low job-growth numbers that pushed the unemployment rate back over 9 percent. The jobs report comes on the heels of both a devastating report that found housing prices hit new lows in March and warnings from economists that the tumbling real estate market threatens to drag the economy back into recession.
"The jobs numbers, they ain't pretty, man," economist Jared Bernstein told HuffPost. Bernstein left the Obama administration last month to join the Center on Budget Policy and Priorities, a highly respected left-of-center Washington think tank. "You don't wanna make too much out of one month, but when that month reflects other trends in the economy, you want to take note."
"The bottom line is that the job market simply isn't meeting the basic employment and income needs of working families," he said.
"This is an emergency," said Preeti Vissa, community reinvestment director of the Greenlining Institute, a foreclosure relief advocacy group. "The ongoing foreclosure crisis is well on the way to dragging the whole economy into a double-dip recession if strong action isn't taken immediately."
The connection between the foreclosure crisis and rampant unemployment is well known by economists and the administration. Diving home values and heavy debt burdens force cutbacks in both consumer spending and tax revenue for local governments. These reduced spending levels and lower government revenues force layoffs in both the public and private sector. And those layoffs, in turn, spur more foreclosures. A July 2010 report from the International Monetary Fund suggested that foreclosure problems added 1.25 points to the unemployment rate -- or more than 10 percent.
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