The decline is feeding on itself

The nation lost a staggering 533,000 jobs in November for the worst monthly decline in 34 years....The unexpectedly high job losses, coupled with the threat of an auto industry collapse and escalating home foreclosures, point toward a much deeper recession than many economists had anticipated.

Harry Holzer, a labor economist at Georgetown University, warned that a vicious cycle of job losses and foreclosures appeared to be picking up steam. A trade group reported Friday that a record 1 in 10 U.S. homeowners were either late on their mortgage payments or in foreclosure at the end of September.’You’re at that point in the business cycle where declines feed on themselves,’ Holzer said. ‘People who lose their jobs are going to have less money to make their housing payments, so that could increase foreclosures. They are also going to buy less, and declining consumer purchases are going to cause more job cuts.’’There’s nothing to suggest that we’re going to bottom out any time soon,’ he added.