New Zealand Consumer Defaults Rise, Credit Applications Fall

Originally posted on Bloomberg

New Zealand consumers are making fewer applications for credit and are more likely to default on bills and mortgages as a recession enters its fifth quarter, according to the nation’s biggest credit-checking company.

Applications for personal loans, hire purchases and mortgages fell 12 percent in the six months ended Dec. 31 from a year earlier, Veda Advantage Ltd. said in an e-mailed statement. Mortgage applications alone dropped 20 percent, it said.

Rising unemployment and falling house prices are weighing on confidence and making consumers unwilling to commit to new loans amid a recession that started in the first quarter of last year. The jobless rate may rise to a 10-year high of 7 percent this year from 4.6 percent, the government forecasts.

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U.S. Recession Worst in Three Decades, Business Economists Say

Originally posted on Bloomberg

The U.S. recession will be the worst in more than three decades as job losses mount and consumers and companies retrench, a survey of business economists showed.

The world’s largest economy will shrink by 1.9 percent this year and a total of 2.8 percent in the current downturn, the most since the 1973-75 slump, according to the median estimate in a poll taken by the National Association for Business Economics. Another 3.2 million Americans will be cut from payrolls in 2009, pushing unemployment to 9 percent by year-end, NABE said.

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U.S. Initial Unemployment Claims Jump to 26-Year High

The number of Americans filing first- time claims for jobless benefits unexpectedly jumped last week to a 26-year high, signaling a deepening deterioration in the labor market.

Initial jobless claims increased by 35,000 to 626,000 in the week ended Jan. 31, the highest level since October 1982, the Labor Department said today in Washington. The total number of people collecting benefits jumped to a record 4.788 million a week earlier, today’s report showed.

Companies from Macy’s Inc. to PNC Financial Services Group Inc. are announcing job cuts as consumers and businesses rein in spending, and that’s likely to prompt even further pullbacks in coming weeks. The government is forecast to report tomorrow that the U.S. lost 540,000 jobs in January.

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