MBA: Unemployment won't peak until mid-2010
Wednesday, October 14, 2009 11:45 PM
While those facing debt consolidation and warding off bankruptcy may be pleased by assertions from the Mortgage Bankers Association (MBA) that the economy is improving, they also must brace for the fact that it may not be felt until later in 2010.The predictions, from the association's chief economist Jay Brinkmann, warned consumers not tolend too much credence to economic growth that is seen in the final quarter of 2009. While growth may occur through the holiday season, the MBA predicted that it would slow in the first half of 2010.
Additionally, the MBA predicted that the unemployment rate, which currently stands at 9.8 percent, would peak at 10.2 percent by mid-2010.
"The recession is behind us but the effects of the recession will linger for some time in the form of higher unemployment, and lower levels of business investment and home construction," said Brinkmann, before adding that the economy would grow or contract depending on consumer activity.
"The large losses of consumer wealth in the form of reduced home values and stock market losses, as well as the absolute losses of income resulting from unemployment, reduced employment and the fear of unemployment have constrained consumer spending," he added.
On a more optimistic note, Brinkmann said that the implementation of the federal stimulus package and the eventual peak of unemployment would lead to the resumed growth of the economy for the second half of 2010.
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