Contextual Content

US unemployment highest in 20 years

The US labor department reported Wednesday that consumer prices rose 1.1 percent in June, the highest one month rise in 26 years, and the 12 month inflation rate at 5.0% the highest since may 1991. Testifying before Congress, Federal Reserve Chairman Ben Bernanke suggested that inflation would go higher.The Fed last month broke a string of reductions by leaving interest rates unchanged, a recognition that lower rates had weighed on the US dollar and led to increases in commodities such as oil and food.

The so called downturn is also being fueled by the turmoil and bailout of Fannie Mae and Freddie Mac and the collapse of IndyMac.

The troubled economy is having direct effects on people’s everyday lives.

US home prices have fallen 17 percent over the past year, foreclosure filings surged 53 percent in June with 252,363 homes receiving at least one foreclosure-related notice and More than 71,000 properties were repossessed by lenders nationwide in June.

In addition, access to health care is increasingly out of reach, In 2007, more than 75 million or 42% of all working age Americans either had no health insurance during the year or were under insured, up from 35% in 2003 and almost 16 percent of Americans or 47 million people have no health insurance at all.

The jobless rate stayed at 5.5% percent in June after soaring in May to the highest rate in 20 years, and is expected to reach 6% next year.

Meanwhile, consumers are taking drastic steps in changing their eating habits to adjust to rising food prices.
To add to the economic woes, The Auto Industry, traditionally one of the largest employers in North America as well as offering some of the best wages and benefits is also in a financial tailspin. The Real News Senior Editor Paul Jay spoke to Canadian Auto Workers’ Union Economist Jim Stanford.

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Story Transcript

CARLO BASILONE, PRODUCER (VOICEOVER): The US Labor Department reported Wednesday that consumer prices rose 1.1 percent in June—the highest one-month rise in 26 years. And the 12-month inflation rate is at 5 percent—the highest since May 1991. Testifying before Congress, Federal Reserve chairman Ben Bernanke suggested that inflation would go higher.

BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE: Inflation has remained high, running at nearly a 3.5 percent annual rate over the first five months of this year, as measured by the price index for personal consumption expenditures. And with gasoline and other consumer energy prices rising in recent weeks, inflation seems likely to move temporarily higher in the near term.

BASILONE: The Fed last month broke a string of reductions by leaving interest rates unchanged—a recognition that lower rates had weighed on the US dollar and led to increases in commodities such as oil and food. The so-called downturn is also being fueled by the turmoil and bailout of Fannie Mae and Freddie Mac and the collapse of IndyBank. The troubled economy is having direct effects on people’s everyday lives. US home prices have fallen 17 percent over the past year. Foreclosure filings surged 53 percent in June with 252,363 homes receiving at least one foreclosure-related notice, and more than 71,000 properties were repossessed by lenders nationwide in June. In addition, access to health care is increasingly out of reach. In 2007, more than 75 million, or 42 percent, of all working-age Americans either had no health insurance during the year or were under-insured, up 35 percent from 2003. And almost 16 percent of Americans, or 47 million people, have no heath insurance at all. The jobless rate stayed at 5.5 percent in June after soaring in May to the highest rate in 20 years and is expected to reach 6 percent next year. Meanwhile, consumers are taking drastic steps in changing their eating habits to adjust to rising food prices.

MICHELE EVANS-ARRINDELL: People are buying the most basic food, not anything extravagant, not anything outrageous. I think people might even begin to start missing meals. I know that I’m walking more. I’m only driving my car to church on Sundays. I’m marching around. I’m wearing out my leather. But also I’m more conscious of other people and what they don’t have. You sort of have a feeling of a sense of poverty creeping on people and sort of depressing them and making them more nervous.

JAMIL MOHAMMAD: It’s gotten more difficult, especially if you’re not working. And the economy is bad for the rich people. Can you imagine how bad it is for me and you? So it’s rough. That’s basically all I can tell you. It’s rough.

BASILONE: To add to the economic woes, the auto industry, traditionally one of the largest employers in North America, as well as offering some of the best wages and benefits, is also in a financial tailspin. The Real News senior editor Paul Jay spoke to Canadian Auto Workers Union economist Jim Stamford.

JIM STANFORD, ECONOMIST, CANADIAN AUTO WORKERS’ UNION: We’re looking at downsizing the North American industry by at least a quarter over the next year or two and a potential bankruptcy at one or more of the North American producers.

JAY: And how many jobs might be lost if the worst was to come about?

STANFORD: Well, remember, we’ve already lost tens of thousands of jobs, hundreds of thousands of jobs, actually, in auto over the last three or four years already. It seems like not a week goes by without another one of the auto companies announcing another major restructuring. General Motors announced one this week. They had already announced one just six weeks ago. So restructurings and layoffs and plant closures are coming fast and furious, and we could easily see another 100,000 jobs lost in the major auto manufacturing sector, and then, behind that, several hundred thousand more jobs in the auto parts makers and the other companies which supply the auto industry.

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