Published on WSWS, by Tom Eley, 27 January 2009.
On Monday, employers in the US and internationally announced tens of thousands of layoffs in an indication that the economic crisis is accelerating and spreading throughout the American and world economy—and far outpacing governmental measures to respond. Among the major layoffs: …
… The new layoffs and production suspensions aim to “align production with market demand,” GM said. Analysts anticipate a further contraction in the market for new cars to 10.5 million vehicles from the already abysmal 13.2 million units sold in 2008.
Elsewhere, a new report from the National Association of Realtors (NAR) showed a sharp decline in the value of US homes. While the rate of home sales rose marginally in December from the record lows witnessed in November, the median home price fell by 15.3 percent to $175,400, the sharpest decline on record.
A separate survey by RealtyTrac, an online real estate firm specializing in foreclosed properties, anticipates that millions of foreclosed homes have yet to make their way to the market, as repossessing banks hold back from marketing repossessed homes in the hope that market conditions may reverse. As these foreclosures inevitably come onto the market, they will further erode home values—the basis of wealth for most US families.
On Friday, the government is expected to release its assessment of economic growth for the fourth quarter. The consensus among economists is that the economy shrank at an annualized rate of 5.4 percent. That would represent the most rapid contraction since 1982. (full text).