The search for mortgage/housing "spillover"

Throughout the housing and mortgage market downturn, we haven't seen as much "spillover" as you'd expect. Put another way, housing has been in its own private recession. But the economy ex-housing has continued to muddle through, growing more slowly but easily dodging recession. Unemployment has remained relatively low and consumer spending has hung in there.

But based on the latest jobs figures, that could that be starting to change. Some news worth noting:

* Job cut announcements rose 22% year-over-year in August -- to 79,459 from 65,278 a year earlier. They surged 85% from July. Challenger, Gray & Christmas CEO John Challenger said the cuts stem from "the dramatic collapse of the mortgage and subprime lending markets." He likened the decline in jobs in the finance/lending industry to what happened in the airline industry after the 9/11 attacks.

* The payroll processing firm ADP also said the economy created just 38,000 private-sector jobs in August. That was down from 41,000 in July ... 143,000 in June ... and the lowest level since June 2003.

* Meanwhile, weekly jobless claims have started to trend higher. From a recent low of 303,500, the 4-week moving average of claims has climbed to 324,500. That's not a big move, of course. But if we convincingly break above, say, 340,000, it'll be a sign that we're seeing much more spillover -- the kind that gets economists whispering the "R" word in muttered voices.