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'Financial Security Watch'

Aired March 07, 2008 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ALI VELSHI, CO-HOST: The jobs report is out and it doesn't look good.
CHRISTINE ROMANS, CO-HOST: Welcome to CNN's FINANCIAL SECURITY WATCH.

More and more Americans finding themselves in the unemployment line.

VELSHI: But you can take action to protect your job and your future.

ROMANS: FINANCIAL SECURITY WATCH starts right now.

Hello, everyone. I'm Christine Romans.

VELSHI: And I'm Ali Velshi.

CNN is keeping an eye on your financial security. Over the next hour, a closer look at the declining job situation in this country and what you need to do right now to protect you, yourself, your family and your finances.

ROMANS: But first we want to catch you up on the latest news involving your financial security.

For that, here's CNN's personal finance editor, Gerri Willis -- Gerri Willis.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Christine and Ali, the monthly jobs report is the latest sign the economy is in or headed towards a recession. Sixty-three thousand jobs were lost last month, making it the biggest cut in five years.

January's numbers were revised. The number of jobs lost, 22,000, and that is higher than originally reported. The biggest cuts in construction, manufacturing and retailing.

This, as foreclosures hit an all-time high last quarter. And as if that's not bad enough for homeowners, the amount of debt owed on homes has outpaced home equity for the first time since the Federal Reserve began tracking the data in 1945.

The Fed reports that homeowner equity slipped below 50 percent in the second quarter of last year and fell just below 48 percent in the fourth quarter. Remember, equity is that part of your mortgage loan you've already paid off, plus the value of home improvements and appreciation. Well, if you have any.

And then there is some of the nation's top CEOs testifying on Capitol Hill about the subprime mortgage crisis and their role in it. Leaders from Citigroup, Merrill Lynch and now the infamous Countrywide Financial are explaining how they were compensated in the wake of the nation's mortgage meltdown. We'll monitor what they say to the House Oversight and Government Reform Committee.

Christine, back to you.

ROMANS: All right.

Thanks, Gerri.

There are few things more devastating than losing your job. And this morning's jobs report shows more and more Americans are going through job loss with certain areas of the country, certain industries suffering more than others.

(BEGIN VIDEOTAPE)

ROMANS (voice over): Unemployment is on the rise around the country. Economists worry this sign of recession isn't going away.

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: We're seeing unemployment insurance claims rising, which is I think consistent with the somewhat higher unemployment rate going forward.

ROMANS: Unemployment rates rose in 36 states from December 2006 to 2007, according to the Bureau of Labor Statistics. The biggest jumps -- Nevada, Florida and Illinois, up nearly 1.5 percentage points each. Those states with the highest unemployment rates -- Michigan, 7.6 percent; Mississippi, 6.8 percent; South Carolina, 6.6 percent.

UNIDENTIFIED MALE: High unemployment in the industrial Midwest -- Michigan, Ohio, Illinois, et cetera -- and that's where unemployment's going to rise a lot more this year, you know, plus California, plus states like Mississippi. There's 11 states that are going to see unemployment exceeding 6 percent by the end of 2008.

ROMANS: The causes of job loss -- fewer manufacturing jobs in the upper Midwest and tighter economies in places hit hard by foreclosures -- California, Nevada and Florida.

There are a few bright spots. States with the best jobs pictures: Idaho, South Dakota and Wyoming, at about 3 percent each. And several other areas have improved recently, creating jobs with new and growing industries.

UNIDENTIFIED MALE: The regions in the country that are tending to do well tend to be regions like Boston, like Austin, Texas, like Seattle, that are at the leading edge of the technology frontier. Also areas that have high concentration of health care employment.

ROMANS: But even those states in good shape now could be in for harder times. Moody's Economy.com predicts every state will see higher unemployment by the end of 2008.

(END VIDEOTAPE)

ROMANS: You know, all of which makes you wonder, where are the jobs, what are the jobs, and what you should be doing to get them or secure the job you already have.

VELSHI: And there are answers.

Jennifer Merritt is the editor of the "Career Journal" at "The Wall Street Journal." She joins us now.

ROMANS: Hi, Jennifer.

VELSHI: Jennifer, you study this. You know where those jobs are. When we saw the jobs report this morning, one of the few growth areas we actually saw was in health care.

JENNIFER MERRITT, EDITOR, "CAREER JOURNAL": Absolutely. As the population continues to age, there is just more and more need for health care, for everything from radiologists to read your X-rays, to physicians' assistants and nurses. Health care is booming no matter what the economy does.

ROMANS: In hospitals, in doctors' offices. We talked to an economist earlier this morning -- Ali and I did -- who told us that some of those jobs though are low-paying jobs, others though are more highly skilled. How do you make sure you get one that's replacing the income that you are losing?

MERRITT: You know, there are a lot of new programs out there in community colleges that really offer some of these nuclear radio technology jobs, training within a year, and you can walk out and make $50,000 or $60,000.

You will have to make that investment of $5,000 or $10,000 to take that program, but those are the kinds of jobs that are also growing -- physical therapists, physicians' assistants, things that require a little bit of schooling but are well worth the investment.

VELSHI: Obviously a little more schooling is required to be a teacher, but education continues to be a growing field.

MERRITT: Absolutely. And at all levels, not just teachers of elementary through high school, but also at community colleges, online learning, learning centers. They are all looking for educators. And sometimes you don't need an education degree. You can get training while you are teaching.

ROMANS: The job losses that we saw were in retailing, they were in manufacturing, construction, housing, the same kinds of areas we've seen for some time now. There is a big dislocation of people skilled. Blue collar workers trying to move into the rest of the economy.

How do people navigate that? MERRITT: You know, it can be really tough. Some of the companies, particularly manufacturing companies, have been laying people off, are offering job retraining. You should absolutely take advantage of it if you're in that situation, because there are other types of manufacturing and technology that are still booming in areas like Austin and Atlanta, and you may be able to re-purpose your skills. Otherwise, you might need to go and seek out some extra training at a community college, but it's well worth it.

VELSHI: I was over in Austin about a week ago. The unemployment there is lower than even the state average in Texas, which is lower than the nation, because of that technology. It takes them a little bit longer.

But at one point in Texas we went into the oil fields, the worker there was telling me, "I love these prices of oil, it gives us more jobs." There are a lot of jobs in the oil sector.

MERRITT: Absolutely. The energy industry and petroleum is growing like mad. They are facing lots of growth, but they're also facing a lot of retirement. A lot of older workers are going to be retiring from the oil industry.

ROMANS: Let's talk about some of these other regions. Salt Lake City is another region you say geographical growth for jobs in some of these areas. That's growth in low-paying jobs. Those are health care jobs. Tell us about some of the areas. I guess if you're assuming that you can move to get a job, you know, there are some other places.

MERRITT: Certainly Salt Lake has some growth. But again, housing is very expensive there. And this is a lot of sort of back- office type of jobs.

If you're looking in a place like Austin, or Wichita, Wichita especially right now with aircraft and petroleum industries there, is really growing. Austin is always growing, even when there have been the technology busts, they have other industries that are really strong there, vibrant communities.

Atlanta is another place which is really a logistical hub and a transportation hub. So there is a lot of sort of entrepreneurial spirit and a lot of jobs there.

VELSHI: Jennifer, good to talk to you. Thank you for that.

MERRITT: My pleasure.

VELSHI: Jennifer Merritt, "Career Journal" editor at "Wall Street Journal."

WILLIS: Now, whether we are in a recession or just heading into one, job loss is a real concern for many of you out there. You get a chance to weigh in.

Head over to cnnmoney.com for today's "Quick Vote" question. In the next 12 months, do you believe the unemployment rate will improve, worsen or stay the same?

Cast your vote. We will bring you the results a little later in the show.

And coming up on CNN's FINANCIAL SECURITY WATCH, we'll take your calls. The number: 866-792-3399. Get out your pencil and give us a ring with your questions about the state of your jobs.

And we'll check in with T.J. Holmes on campus with the next generation of career seekers. He'll be live at the University of Georgia.

But first, today's "Reality Check."

(BEGIN VIDEOTAPE)

WILLIS (voice over): From high unemployment to soaring foreclosure rates, recession is the word of the hour. But what does it mean?

According to the National Bureau of Economic Research, a recession is a broad-based economic decline that lasts more than a few months. The decline will be visible in our gross domestic product, the GDP, income, industrial employment, and wholesale and retail sales. But declaring of recession takes times, six to 18 months, in fact. And whether we are in one is still being debated.

We may not know until July at the earliest. But there are a few good indicators.

The Fed's trend of lowering rates is a sign of an economic slowdown. Is the economy producing jobs? Job loss is also a sign of economic weakness.

Is the American public saving more? If so, it usually means we are worried about the economy.

The good news is, the past two recessions have lasted only eight months each. Some economists claim that's because the Federal Reserve has been more proactive, and given the recent rate cuts, that's some reassurance.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ROMANS: All right. There's nothing positive about losing your job, but if you had to find that one tiny bit of optimism, you could think of this as perhaps an opportunity to reinvent yourself.

VELSHI: Brad Karsh in the president and founder of Job Bound in Chicago. Brad's the author of a book called "Confessions of a Recruiting Director." He spent 15 years at Leo Burnett in Chicago. He was the vice president and director of talent acquisition there.

Brad, you looked at 10,000 resumes, you hired a thousand people. I mean, you've really seen everything.

What do I do? I need to reinvent myself. The jobs are going away, and I'm worried that mine might be next.

BRAD KARSH, PRESIDENT AND FOUNDER, JOB BOUND: Yes. It's sort of our first tendency whenever we lose a job. And I know it's not a great situation for anyone.

Our first tendency is to say, all right, I must find the exact same job, in the exact same industry, in the exact same city. And I always tell job seekers, take a deep breath.

Yes, this is a tough situation to go through, but it's also, as you said, an opportunity to perhaps reinvent yourself, to think about doing something different. So, take, even if it's just a couple days, and think, what do I really love to do? What do I maybe want to do for my next step? And is this the chance to get to do it?

ROMANS: Is it the chance? You have to be realistic though, because you can't necessarily, depending on your circumstances, take a job that's going to pay a lot less. Some people can't necessarily pick up and move halfway across country, and other people might not have the financial investment. And, you know, student loan market is seizing up. You might not have the money to go and retrain yourself.

So, how do you go from being maybe a construction manager or a machinist or some of these jobs that are going away, and translate that into something that you can raise your family on?

KARSH: Sure. And, you know, the next step, if you decide that you are going to stay in something relatively similar, is focus on the transferable skills of what you've done and try to apply it to a different industry.

So, let's say you were a construction manager, but a huge part of what you did was handling the technology within the office. Maybe you realize when you sit down that, you k now, 10 to 15 percent of what you did every day was dealing with some technology issues because it was a small office. Well, maybe that's an opportunity for you to realize that you have a passion and an aptitude to move into a field that has more opportunities like technology. So, on your resume, in your job search, you focus on those skills that you have.

VELSHI: What's the opportunity cost? How do you measure the opportunity cost of getting retrained in something? Because I think you're right, a lot of people get very panicky, they lose their job, or they're losing their job. They want to get back into a job and have an income stream as quickly as possible. Sometimes several months or a year spent retraining might be a better investment.

KARSH: Yes, it might be. And again, it depends on what the upside is for that job that you are going to go into.

You just heard about how a little bit of training can pay off in terms of some high-paying jobs in the medical industry or in the technology field. Everyone's situation is going to be a little bit different.

If you have not yet lost your job but are afraid that you are, now is the time to try and get that training while you're still employed. So, go to school at night, go to school on the weekends, practice this stuff while you still can and while you still have a revenue stream.

ROMANS: You know, Brad, I think people care about workplace issues so much. I mean, even if you have a job and you don't think you are in danger of losing your job, do you lose some of your negotiating ability at work if other people are firing people and downsizing? I mean, is it now not the time to ask for a raise, to ask for a new job, to maybe, you know, tell your boss what you really think?

KARSH: What you really think. Well, it could be, or it could be an opportunity.

ROMANS: Sure.

KARSH: So, for a lot of people, if you are working in a department of 15 that is now a department of five, maybe you have more responsibility. Maybe you can say, I'm now doing the work of three people. I don't want all three other salaries, but, you know, can you give me a 15 percent bump? And certainly companies aren't flush with cash, but at the same time, if you're taking on more responsibility, maybe it's the time to get the promotion, and alongside of the promotion comes some more money.

ROMANS: And they have to retain their productive workers who are really carrying the load.

KARSH: Exactly.

VELSHI: You sometimes could be more important.

Brad, job layoffs and downturns in the economy often result in a spike in the number of people who run their own businesses. If you've always dreamed of running your own business, is this an idea?

KARSH: Yes, it is. It's a wonderful idea. And again, this could be the impetus to start something new, different or interesting for you.

If you've had a passion, now might be the time to pursue it. Again, it will depend on your personal situation.

Again, I also always advise people, if you can start that business, as long as it's not a conflict, on the side while you are still employed, get some traction going, and then leap into it, take the plunge.

ROMANS: Well, here I am the angel of gloom again here, because a lot of times small businesses lose money in the first year. So you've got to be ready. You have to prepare. KARSH: You have to be ready. So, again, that's why I advise you, it is always advisable to try and get that stuff up and running on the side if you can while not conflicting with what you are doing at work. It is going to be a much better option for you.

And it depends what the business is. You might be earning some money from the get-go. It might be an investment at times.

VELSHI: Brad, good to talk to you. Thank you.

Brad Karsh is the president and founder of Job Bound, joining us from Chicago.

KARSH: Thank you.

WILLIS: Well, we can talk all about the jobs report and where Americans are looking for jobs. But it's important to hear from you, to check America's pulse.

CNN's T.J. Holmes is live at the University of Georgia in Athens, and he is talking to some of the future workers of America -- T.J.

T.J. HOLMES, CNN CORRESPONDENT: Hey there.

Future workers are a bit worried. A tough assignment really for me today, guys. You sent me to the belly of the beast, if you will.

I'm a University of Arkansas graduate. So here I am today among the University of Georgia Bulldogs.

But you know what? No matter how we battle it out on the field and the courts, every college graduate, no matter where you are, one thing you do have in common, you're going to all be looking for jobs. And right now a lot of these students, it's been interesting to talk to them, they have some serious concerns, some serious worries about this job market.

They don't have to be reading a newspaper every day. They don't have to be just entrenched in news and news coverage to know and to hear that there are concerns, there are issues with this economy right now, and a big issue with jobs.

I've got a collection of students here, some seniors we found that we're going to talk to in a little bit. You'll be interested to know what they have to say about this upcoming job market and about their prospects heading into the job market.

They actually have to -- you know, everybody is excited about graduating, but, you know, they understand that they have to maybe temper some of their expectations. They're not as excited about graduation as maybe they would have been, and they know they really need to manage their expectations about the jobs they find and what kind of salaries they're going to have.

So we'll be talking to them here coming up.

Interesting stuff to hear, guys.

WILLIS: T.J., thank you for that. We'll be back to you in a bit.

Right now, we want you to pick up that phone. Call 866-792-3399. We're going to answer all sorts of question about your money, plus why your credit score really does matter to your job security. Very interesting information when we come right back.

(COMMERCIAL BREAK)

WILLIS: Welcome back to CNN's FINANCIAL SECURITY WATCH.

You are at The Help Desk. We're going to take your calls, your e-mails, and try to get you some real answers to your problems.

To help us do that, we have Jack Otter, deputy editor of "Best Life" Lynette Khalfani, author of "Your First Home"; and Carmen Wong Ulrich. She's author of "Generation Debt."

Welcome, guys. Good to see you.

All right. Let's go to the first caller. It is Elizabeth in Massachusetts. Or Mississippi -- I'm sorry.

Elizabeth, what's your question?

UNIDENTIFIED FEMALE: Gerri, thank you for taking me.

WILLIS: Let's hear it.

UNIDENTIFIED FEMALE: I'm an authorized user on several credit cards account. I was an authorized user. And while I was on the account, I would make sure they were paid timely.

Some dissension came between the person. So I asked to be removed, and the accounts are now very delinquent. And I wanted to know -- is this affecting my credit terribly?

WILLIS: All right. Well, that's a great question. A lot of people wonder, what can I do to improve my credit score?

Carmen, let's go to you. What do you think?.

Yes, there's a lot you can do.

CARMEN WONG ULRICH, "GENERATION DEBT": First of all, you've got to pay on time. And since she is an authorized user, that does follow her along. But as a user, that also is going to affect the other person's credit history as well. So it's kind of double the responsibility. So she really needs to get on top of that and pay those bills on time. The best thing you can to do to raise your credit score.

WILLIS: All right. Well, we're going to try to squeeze in a lot of people. So let's go to Katherine (ph) from Oregon. Katherine, what's your question?

I'm hearing myself but not Katherine.

All right. We're going to move on to e-mails. Maybe we can get Katherine back in just a moment.

Tasmine (ph) in Virginia has a very good question. She asks: "We found a house that we would like to buy but my current home won't sell. We can afford to pay both mortgages for three to six months, but should we take a chance?"

Jack?

JACK OTTER, DEPUTY EDITOR, "BEST LIFE": I wouldn't play that game. You might get lucky and move that second house, but that's just way too dangerous a position to be in right now.

You're better off not owning any houses and waiting for prices to come down, because that's the direction they're going. I would make sure you sell that old house before putting a single penny down on the new one.

WILLIS: And you know, I'd add, in the fourth quarter, prices in Virginia were down just a smidgen, so you are sort of playing with fire here.

Another e-mail, this one from Karen in Georgia. She writes, "I'm a 21-year-old student and I have great parents who have supported me through school. I have no credit whatsoever in my name. While it is better than having bad credit, it makes it difficult when applying for apartments. What's a good and non-risky way of building credit from the beginning?"

Lynette?

LYNETTE KHALFANI, "YOUR FIRST HOME": This is a great question. You know, people often think they have to assume debt to improve their credit score -- you know, getting an auto loan, credit cards, et cetera. You don't.

You can use your everyday bills, things like your utility payments, your Verizon cell phone bill, for example, anything like that you are paying, and establish credit through that means. There is actually a place you do it called Payment Reporting Builds Credit.

WILLIS: And they build that for you.

KHALFANI: Absolutely.

WILLIS: And you can actually use that as a way of saying, hey, I've got good credit.

All right. I think we've got Katherine back on the line.

Katherine, what's your question? UNIDENTIFIED FEMALE: Yes, hi.

WILLIS: Hi.

UNIDENTIFIED FEMALE: I wanted to ask you about credit card debt. And when you have a limit and then you haven't been able to pay regularly, and there's over the limit fees and late fees, and now what was a cap at $400 is now $700 and all these extra fees. I'm wondering how can you negotiate those fees with the credit card company, or do you do a settlement? Which I know will affect your credit.

WILLIS: Great question. You know, late fees hit everybody. And we all hate them.

Carmen, I'm a big fan of picking up the telephone and talking to your lender.

ULRICH: Yes. Communication. It is all about communication.

You know, creditors made $18 billion on fees last year alone. So what she does need to do is pick up the phone, talk to your lenders. You know, half of consumers last year who called up to have fees waived did get them waived. So I know she's in pretty deep, but at least she can get the number brought down a little bit and pay it off as soon as possible.

WILLIS: Great idea.

OK. Let's go to one more e-mail here, Peter in New Jersey. He asks: "I'm a first-time homebuyer taking advantage of this down real estate market, and I'm getting ready to lock in my loan. I have a closing date of April 18th."

Congratulations.

"Given all the news about the economy and the Fed cutting rates again, how should I time the market in order to get the best rate for my loan? I am considering a 10-year ARM. And should I wait until March 18th to see what the Fed does?"

You know, playing the Fed game can be difficult. Sometimes it's better just to go out and do what you need to do because it's tough, isn't it, Jack, to predict what's going to happen?

OTTER: Well, there is an extra factor here. It's not only what the Fed does, it's what the bond market does.

And right now there is a growing distance between interest rates you pay on U.S. treasury bonds, for instance, and what you pay for a mortgage. That's growing because of the credit crunch, and everyone is so scared to take on any debt.

So frankly, I heard one thing that I didn't like there. He said he is thinking of a 10-year ARM. Right now I would go with a 30-year fixed. The spread is just not worth it. Yes, he'll save a few bucks a month... WILLIS: Such a little difference once you work out the numbers.

OTTER: But I'd say lock in at 30, and if interest rates plummet he can refinance.

WILLIS: OK. All right . Well, great advice, Jack.

Lynette, Carmen, thank you guys for helping us out. We'll be back to you in a little bit..

VELSHI: Coming up next, why your credit score actually matters to your job security. And we'll check back with T.J. Holmes. He's talking with the job seekers of tomorrow.

All that and so much more after your latest headlines.

(COMMERCIAL BREAK)

DON LEMON, CNN CORRESPONDENT: I'm Don Lemon at the CNN world headquarters here in Atlanta. CNN's special FINANCIAL SECURITY WATCH continues in 90 seconds. But first, a check of the stories making headlines right now.

Tornado touchdown. At least two twisters ripped through northern Florida today toppling trees, power lines and destroying several homes. The National Weather Service says two houses were blown off their foundations. That was near Tallahassee.

Georgia also got hit here. Same scene there, trees, power lines leveled and a roof was ripped right off a house. The tornadoes are all part of a dangerous storm system that's moving across the south bringing heavy snow to parts of Texas and Arkansas and heavy rain in the southeast. Meteorologist Chad Myers is here now with the very latest on this line of storms.

Chad.

CHAD MYERS, CNN METEOROLOGIST: Yes, Don, we have a tornado watch, which means the conditions are right for a storm that might have a tornado. Watch is the one that we have for a long time. It's still 7:00 tonight.

There are no warnings right now. Nothing that indicates a tornado's on the ground or even, for that matter, spinning. But we will watch it all the way down from Orlando, to Tampa, even out toward Melbourne as well. This is kind of a big story for a lot of folks in Orlando because this weather is going to be rolling through right about the rush hour tonight.

Also back up. They're not rushing here in Cleveland, Columbus or Cincinnati. An awful lot of snow coming down there. Cincinnati and Columbus could easily pick up a foot of snow, just like places in Arkansas did last night.

Don. LEMON: We have a sad update to that massive lumberyard fire we've been following this morning in central North Carolina. CNN is now being told that two firefighters were killed. The Associated Press is reporting two other firefighters were hurt. The five-alarm fire broke out at the Salisbury Millware (ph) Company. No immediate word on what caused that fire.

I'm Don Lemon in Atlanta. Now back to CNN's FINANCIAL SECURITY WATCH.

ALI VELSHI, CNN ANCHOR: I'm Ali Velshi with Christine Romans and CNN's personal finance editor Gerri Willis. We are keeping an eye on what is going on in the economy. Today it's about jobs. The unemployment rate in February came down to 4.8 percent. That's supposed to be good news. But the U.S. economy shed 63,000 jobs. That follows 22,000 jobs lost in January. That 63,000 is the fastest job loss in one month in five years.

CHRISTINE ROMANS, CNN ANCHOR: And the reason why the unemployment rate came down is because literally hundreds of thousands of people are dropping out of the work force either because they are disappointed or disgruntled with prospects of finding a job or they just aren't finding jobs. And we know we've been watching the long- term unemployed, people without a job for more than six months and that's a number that has been growing. You saw jobs lost in manufacturing, in construction, in housing, even in retail, which is kind of a grim sign about what that consumer is doing who drives two- thirds of the economy.

VELSHI: We saw jobs gained in health care and food services, but some people are saying that the quality and the wages on those jobs don't replace the ones that have been lost.

ROMANS: That's right. And government jobs also grew. Many economists have been saying, you can't carry through a jobs market by just growing government jobs.

Peter Morici of the University of Maryland said he's been an economist, you know, for 40 years, and a labor economist, and he said this is the worst sort of several months of job situations that he has ever seen.

You've got to have about 115,000 new jobs created every month just to keep up with new people entering the work force. So when you're seeing job losses two months in a row and then not very many created at the end of last year, that's a signal that there are a lot of people coming into the American labor market who are not finding a job.

VELSHI: I'm going to just push your cloud over to the side so I can bring my own one in. Oil has crossed $106 a barrel now. The speed with which the price of oil is increasing is dramatic. We're looking at gas prices above $3.18 a gallon. Less than five cents away from it's all-time high of $3.22.

Keeping an eye on the pulse of this country, CNN's personal finance editor Gerri Willis is with us.

Gerri, sorry for all the bad news.

GERRI WILLIS, CNN ANCHOR: Well, I was looking for, you know, a ray of sunshine there, but I guess not. You know it is hard enough to save money and plan for the future if you're already in the job market, but imagine jumping into the market for the first time. Let's go back to T.J. Holmes in Athens, Georgia, with a group of University of Georgia students.

T.J.

T.J. HOLMES, CNN CORRESPONDENT: Yes, Gerri. You hit the point there. So many people already in the job market. They worry about losing jobs and then finding another.

Well, these are some young folks here who have to worry about trying to get into that already-tough job market. We got a little huddle here going on. Our economic huddle, if you will. We're in here tight trying to figure this thing out.

But I'm here with Thomas, I'm here with Jane, I'm here Katie, I'm here with Lance, all seniors going to entering the job market.

And, Thomas, I'll start with you, political science major, thinking about law school. Something you hit on earlier is, you know what, these days -- and a good perspective. You got to monitor and temper your expectations these days.

THOMAS, UNIVERSITY OF GEORGIA STUDENT: Exactly. You can't be idealizing what you think the market will be and that you have to -- you have your ideal job of what you'd like to do. But the reality is, is that that might not be there as soon as you graduate. So you kind of have to temper that and just go into whatever's available and then hopefully use that to better where you're at, make yourself better and then use that to springboard into what you want to do.

HOLMES: And, Jane, to hit on that point there. You're in advertising. And you're realizing now that that might not work out so well. So perfect. But you talked about something. You said you have a passion for. Sure, I might not make that much money, but you have a passion for it. Is that going to be enough?

JANE, UNIVERSITY OF GEORGIA STUDENT: Well, that is my biggest concern right now is that I -- the reason I got into journalism and advertising is because it's what I want to do. It's what I know I'm good at, what I'm passionate about and I'm realizing now, looking at these entry-level jobs, anything that's available right now is not going to be making the type of money that I would hope one day that I could make.

And I do believe that if you're good at what you do and if you believe in what you do, then eventually you can get to those places. But as a senior and looking at these entry-level jobs right now, that is a daunting task. HOLMES: And, Lance, what do you do there? How will it change how you go about looking for a job? And I hear some students talk as well about, you know maybe I'll stay in school a few more years, maybe I'll go to graduate school, maybe I'll go to law school. What's your thinking going into the job market?

LANCE, UNIVERSITY OF GEORGIA STUDENT: Well, the thing in today's economy, as there's talks of us headed into a recession, is the job market's very competitive. So you have to do as much stuff as possible to get your resume boosted, whether that's getting an internship, getting additional schooling. I know personally, as a senior, I'm going to do as much as I can to boost my resume so that I can hopefully, potentially, get a job going out of college.

HOLMES: And, Katie, is it time -- are we in panic mode just yet? Now on spring break coming up, are you going to spend that spring break hang out and having a good time or do you have to spend that week taking advantage and trying to find a job? Really, how close are you to panic mode just yet?

KATIE, UNIVERSITY OF GEORGIA STUDENT: I'm a little in panic mode but I'm just going to take it as it comes. I mean, I'm sure I'll find a job somewhere, but, I mean, you have to start out somewhere and I really have no clue what I want to do when I graduate but I'm sure I'll find that job.

HOLMES: And, Thomas, back to you. And, again, you're the one that has such a good attitude about it. But tell me how that attitude -- you got to this point but how it kind of evolves. Everybody comes in bright-eyed, bushy-tailed as freshman. You're so excited and then you wait for that day, to that graduation. You're supposed to be so excited but you can't be as excited.

THOMAS: I mean, you can be excited. And there's a level of excitement. Anything different, when you're changing your path, is exciting. But when you're doing it, it's kind of -- you do have to temper it. You have to bring it down to reality because what we do here in classrooms and what we learn day-to-day, it's not reality. We're preparing for that reality. And you just have to kind of keep that in mind when you're doing what you're doing.

HOLMES: And, Jane, I know you said your dad is on you big-time and reminding you about what's going on. What are the warnings, I guess, he keeps giving you?

JANE: My dad is basically telling me all the time that it's a competitive market. Everyone is looking for a job right now. We have a lot going on in our economy and as everyone's graduating he's like, you've just got to network, network, network. It's anyone you talk to, you never know who can springboard you where. So that's the advice I've been given.

HOLMES: Well, I hope the networking is going well. We got a little network here going on. A little huddle. We had to get in here tight. But, Thomas, Lance, Katie, Jane, seniors. If anybody's looking to hire, we ran into a lot of good folks out here at the University of Georgia campus. But it is, guys.

Ali, I'll hand it back over to you here, but this is a -- it's unfortunate. We didn't have to go through it. I mean it's always a scary time, you're leaving school. But to have to leave school and enter the job market that we're seeing here day in and day out is a scary time for a lot of these young folks. But as we heard Thomas here say, a lot of people could take his advice, you know, you got to temper those expectations and go with it.

VELSHI: And, T.J., you know, a lot of us got into trouble with credit when we were in college. So I'm going to make you the big man on campus if you share this information with us. Coming up, jobs and your credit score. Why you need to hear this information. We're turning the show over to you. Give us a call, 866-792-2399. Answers to your questions right here on CNN FINANCIAL SECURITY WATCH when we come back.

(COMMERCIAL BREAK)

VELSHI: Welcome to CNN's FINANCIAL SECURITY WATCH. Christine and I have actually been debating in the last couple minutes whether or not this news we're about to give you is a big deal. We already knew it, but one of President Bush's senior economic advisers has said at a press conference that it is possible that economic growth will be negative in the current quarter. Christine makes the argument that everybody else who follows this already knew that. The administration seems to get a little late on to this carriage.

ROMANS: Anyway, we'll see what is coming out of Washington, the politicians and the lawmakers, about what's happening in the jobs market and the economy.

But first, you hear credit report and you think, what, car loan, mortgage, home equity loan?

VELSHI: You probably don't connect the words credit report with your job, but you should. John Ulzheimer is with credit.com. He's the author of a book called, "You're Nothing but a Number."

John, credit reports and jobs, what do the two got to do with each other?

ROMANS: Yes, and why does my boss have any business knowing what my credit report says?

JOHN ULZHEIMER, CREDIT.COM: Sure. And a fair question. The Fair Credit Reporting Act gives all employers the right to pull your credit reports as part of their pre-employment screening. So that's the answer to your question.

VELSHI: Pre-employment or once you're employed?

ULZHEIMER: Pre-employment screening. That's exactly right. What they're looking for -- think about it from their perspective. I'm about to put you in front of the teller's drawer with $15,000 in cash. Do you want to put someone there who has $10,000 of collections and collectors hounding them? It might not be the best match.

ROMANS: So if you're out there looking for a job right now, you should be aware that that credit report, which doesn't necessarily contain your credit score, but your credit report which shows judgments, liens, it can show -- there's ugly stuff that can show up on there. You can kind of get the hints that there's maybe a bankruptcy, divorce. All kinds of different things on there. The person who you're sitting across from the table and being interview by might know all that information.

ULZHEIMER: They'll know about it up-front. And so the best strategy is, don't duck it. Attack it, address it. The segment you just did at the University of Georgia. These kids spent four years earning a fantastic GPA and an impressive degree, but hopefully they didn't get into debt that will disqualify them for a job that they otherwise would have been a fantastic fit for.

VELSHI: Do you know that they're going to pull this report? Do they have to tell you or not necessarily?

ULZHEIMER: Yes, they absolutely have to disclose it to you. And, this is even better, they cannot use the credit report information as the sole reason to disqualify you for the job. It has to be part of the component of the decision.

ROMANS: How many employers do you think use it?

ULZHEIMER: Well, anybody in the financial services world absolutely uses it.

ROMANS: So if you're dealing with money -- if you're looking for a job dealing with money, you can pretty much bet that your potential employer is trying to figure out how you've been with your own money.

ULZHEIMER: You hit the nail on the head. You're exactly right. So financial services and any job where you'll going to have access to sensitive financial information. It's not just the money, it's also the information that's very valuable. And the government. If they're giving you clearance for highly-sensitive information, they want to know if there is something that someone can leverage in order to get at that information. It's the whole flesh is weak mentality.

VELSHI: Is this the same credit report that other people get if you're looking for a loan or credit card?

ULZHEIMER: It is heavily redundant with the same credit reports the credit bureaus sell into the financial services world. There are some differences. The one, primary difference is, they will not sell a credit score. The credit score is not built to predict pre- employment or how good of an employee you're going to be. It's built to predict risk from a lender's perspective. That's the primary (INAUDIBLE). VELSHI: I was driving down the highway the other day and I saw a sign in New Jersey that said, we're not interested in your credit score, your credit report or something, we just want you to drive well. Those credit reports are used for things other than your credit. How broad is this beyond employment?

ULZHEIMER: It is more broad than you will ever imagine. Not only for any financial services. We all know that. Now we all know about employment, insurance underwriting for homeowners and auto. They want to know -- they really do want to know what kind of credit you have before they'll underwrite a policy in your name.

ROMANS: I think a lot of people don't know how much of your information is out there to so many different sources. I mean, in some cases, it's hundreds and hundreds of different kinds of organizations can just tap into all this personal information about you. And it is personal -- right down to where you shop, where you spend money, what your favorite brands are, I mean what kind of store credit cards you have, what kind of trouble you've been in with the law.

ULZHEIMER: Think if something as simple as where you got your taxes done last year. Any airline miles clubs that you're a member of. Any frequent hotel clubs that you're a member of. They all have your personal information. You're in the system.

ROMANS: Do I have control of that information. I mean, how can I get control of my information? I talk about this with Ali all the time.

VELSHI: I just assume everybody's got mine.

ULZHEIMER: And, you know, what, you should assume that.

ROMANS: And he's got nothing to hide.

ULZHEIMER: You should assume that. The fact that you can moisten a chair makes you a target. You're in the system. And so you shouldn't really lose sleep over it.

But your question was actually a very good one. There's a difference between regulated information and unregulated information. Things like your credit is regulated information. Things like where you shop, that is unregulated. I can go buy that information about both of you after I leave the set today.

ROMANS: Please don't.

VELSHI: It's out there.

ROMANS: I know. Ali doesn't care. I have nothing to hide.

VELSHI: Good to talk to you. Thank you for that good advice.

ULZHEIMER: Thank you.

VELSHI: John Ulzheimer is the author of "You're Nothing but a Number."

WILLIS: Next up, it's you. Your e-mails, your phone calls. Give us a call, 866-792-3399. The show is yours next.

And for more on your finances, check out cnn.com's special report "Right on Your Money." Get tips on how to better manage and invest with money and with video tutorials and interactive guides. You can also read or share I-Reports with others. That and a lot more as cnn.com/rightonyourmoney.

(COMMERCIAL BREAK)

WILLIS: We're back now at the help desk where we're going to take all your phone calls and e-mails and try to get you some answers. Jack Otter, Lynnette Khalfani-Cox and Carmen Wong-Ulrich, thank you guys for sticking around.

Let's go right to those cell phones. Our first call is from Michael in Ohio.

Michael, go ahead.

CALLER: Hello.

WILLIS: Hello. What's your question?

CALLER: My question is, what's the most important mistake people make in buying a house?

WILLIS: Well, that's pretty straightforward. What's the biggest mistake people make in buying a house? I've got to tell you, I think people have been spending too much money on them.

Lynnette, what do you think?

LYNNETTE KHALFANI-COX, AUTHOR, "YOUR FIRST HOME": I absolutely agree. I talk about this in my new book called "Your First Home: The Smart Way to Get It and Keep It." That's one of the reasons we're seeing so many foreclosures. Frankly, a lot of people were not financially prepared for the ongoing costs of home ownership. It's one thing to buy a home. It's another thing to maintain that over time. You've got to think beyond just principle, interest, taxes and insurance.

WILLIS: And, you know, people miss a lot of costs of owning home, like maintenance, which can really adds up over time.

KHALFANI-COX: Absolutely.

WILLIS: OK. We've got an e-mail from Dennis in Boston. He says, "is it a good idea to cancel a credit card and does it affect your credit?"

Carmen.

CARMEN WONG-ULRICH, AUTHOR, "GENERATION DEBT": Yes, you know, it depends. If it's a really old card, you know, the length of your credit history, that's about 15 percent of your credit score. So you really -- the longer the history, the better it is. If you've got some old cards, you can cut them up but leave them open. But if you have too many cards, that's not a good thing either. So cancel the ones that are most recent.

WILLIS: All right. That's great. Great advice.

We've got another e-mail from Denver, Colorado. This person asks, "how difficult will it be to purchase another home if you have a foreclosure on your credit report?" Now I know it takes seven years to get a foreclosure off your credit report. It's not good news.

Jack, what do you think?

JACK OTTER, DEPUTY EDITOR, "BEST LIFE": Yes, he's in a tough position. And the problem is, even if he can get a mortgage, it's going to be a lousy rate. So I would say he's going to want to work very hard to build back his credit score with every trick in the book, starting with the bills and having the credit cards but not actually carrying a balance on them because he wants to, obviously, shore up his financial position. So keep the credit cards, pay them off every month, maybe cut them up. And then any other thoughts on how he could do that?

KHALFANI-COX: Don't think it's hopeless, though. Don't think it's hopeless because, you know, in years past, if you had a foreclosure or a bankruptcy, one of those major, negative blemishes on your credit report, you were kind of out of the market for a while. Frankly, I've heard of a lot of consumers who filed for bankruptcy, who had foreclosures, and who, a year or two years later, were being offered everything from credit cards to mortgages from different lenders.

WONG-ULRICH: Yes, I mean, a couple years makes a big, big difference. And most creditors -- most lenders are going to look at your past year history or past two-years history as the best predictor of how you're doing and how you're going to do.

WILLIS: So they don't have that long of a time horizon anyway.

OK.

OTTER: And, of course, (INAUDIBLE) so that you can put a big down payment down because that's really going to help.

WILLIS: It's always good to have some money in the pocket, right?

OK, Monique in New York. I believe you've got a question for us. Go right ahead.

CALLER: Hi. How you doing?

WILLIS: We're great. CALLER: I want to know, how do you negotiate with your mortgage company? I've had to move because of a job and I'm not living in the home and they don't want to work with me because I'm not living in the home.

WILLIS: OK. So you're talking about your mortgage lender and how can you negotiate with them. I know this has been a big problem for folks out there. They're very concerned. They can't get anybody to pick up the phone.

Carmen, what do they do.

WONG-ULRICH: You know, they should be talking to you because this is their opportunity to make sure that they get as much money from you and (ph) your home as possible before the market goes down even further. So continue to try negotiating with them. And put yourself in a position where you know what your rights are and what you deserve in terms of their attention and the interest rates.

KHALFANI-COX: And talk to the right people as well. You know, people have to go to the workout department. Those are the mortgage area specialists who are designed to deal with people who are either behind or can't afford. Don't call the debt collection side of the mortgage business. They just want to collect.

WILLIS: And people get stuck there all the time. Yes, that's a big problem.

We've got an e-mail -- guys, you're doing great. Mike in Minnesota asks, "when asking a credit card company for a rate reduction, what approach do you take?" I'll tell you the approach I take. I pick up the phone and I ask for it.

Is it any more complicated, Carmen?

WONG-ULRICH: No, it's really not, I mean especially if you have great credit. You know, you should go and pick up the phone with the confidence to know that's what you deserve, you deserve a lower rate. And, of course, and this makes some sense, just be nice. Just be very nice and be very polite, you know, and ask for a supervisor if someone cuts you off really too quickly. Take some notes, get some names, ask for a supervisor and see if it works.

WILLIS: Climb the tree, that's right guys.

WONG-ULRICH: Yes, that helps. That helps.

KHALFANI-COX: I think there's a couple of other tips, though, that people could really use as well to get that lower rate and to use certain things to their advantage. You can say, hey, listen, I just got another offer in the mail from one of your competitors and they're offering me a much lower rate. Can you match or beat that? You can also say, look at how long I've been a customer. I've been with you five years. I want to stay with you, but, you know, I will switch if . . .

WILLIS: You don't want to lose me, right?

KHALFANI-COX: Exactly.

OTTER: And, finally, be ready to call their bluff. Be ready to say, OK, I'm closing this card out.

WONG-ULRICH: Yes, go somewhere else.

WILLIS: And I've got to close up this conversation right now. Thank you so much, guys.

Let's take a final look at the results of today's CNN Money poll. We asked, in the next 12 months, do you believe the unemployment rate will improve, get worse or stay the same? Fourteen percent of you said it will improve, 76 percent of you say, hey, it's going to get worse and 10 percent say it's going to stay the same. As always, you can log on to cnnmoney.com for the latest news about your financial security.

Christine.

ROMANS: Gerri, the economy clearly a top concern for our viewers. We'll be back with more FINANCIAL SECURITY WATCH.

(COMMERCIAL BREAK)

ROMANS: Good afternoon and welcome back to FINANCIAL SECURITY WATCH.

Later this afternoon, at about 2:10 Eastern Time, we'll be getting a brief statement from the president, we're told, on the South Lawn of the White House reacting to the jobs report this morning and the state of the economy.

VELSHI: And we're keeping an eye on markets, having a rough day, and oil topping $106 for the first time ever today.

Gerri, all this stuff wraps right back into what people are concerned about, where it hits them in the pocketbook.

ROMANS: (INAUDIBLE) market, right?

WILLIS: Well, you know, I was thinking there is some good news here, right? I mean, you know what, interest rates are low. Housing prices are low. If you're somebody out there who's been kept out of the market because of what's been going on, now is the time to start thinking about, you know, maybe, maybe, maybe looking and buying a house. Although maybe it hasn't gone down as much as it's going to go down.

VELSHI: And your advice from earlier, fixed mortgage rates are in a good place right now.

WILLIS: That's right.

VELSHI: They've moved up a little bit, but they're still good. It may not be worth taking that risk on variable rates.

WILLIS: All right. Don't forget to tune in this weekend to "OPEN HOUSE." How to bounce back after losing your job, boost your credit score now and some everyday tips for saving money, from your mortgage, to your morning cup of coffee. That's all coming up tomorrow at 9:30 a.m. Eastern right here on CNN, and 3:30 p.m. Saturday and Sunday on Headline News.

ROMANS: And coming up this weekend on "Your Money," we take a look at how the middle class is getting by. For the first time since the 1940s, homeowners now own less than half of their house. Add high oil and gas prices to the mix. The news pretty grim. We're going to see how you're staying afloat and have some important advice for you. That's at 1:00 Eastern on Saturday and again at 3:00 p.m. Eastern on Sunday.

VELSHI: Well, good to spend a little time with both of you. I've been on the road for a long time, so it's nice to get it all together.

ROMANS: Welcome back. Welcome back.

VELSHI: Sorry to bring back the bad economic news.

That does it for us. We're going to Atlanta now for "CNN NEWSROOM" with Don Lemon and Brianna Keilar.

DON LEMON, CNN ANCHOR: Fewer jobs. That means higher anxiety. Foreboding figures from the U.S. Labor Department. The economy lost some, get this, 63,000 jobs last month alone. The most in five years.

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