WASHINGTON, Dec. 24, 2008
New Jobless Claims Make Unexpected Jump
Latest Unemployment Figures Are Worst In 26 Years; Consumer Spending Down For Fifth Straight Month
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The Labor Department reported that initial requests for jobless benefits rose to a seasonally adjusted 586,000 in the week ending Dec. 20, from an upwardly revised figure of 556,000 the previous week. That's much more than the 560,000 economists had expected.
That's also the highest level of claims since November 1982, though the work force has grown by about half since then.
A Labor Department analyst said auto-related layoffs were a factor in the increase.
Meanwhile, the bad economic news sent oil prices tumbling Wednesday, with a barrel of crude briefly fetching less than $37 in thin Christmas Eve trading.
The four-week average of initial unemployment claims, which smooths out fluctuations, increased to 558,000. That's the highest since December 1982, when the economy was emerging from a steep recession.
There was some improvement in the number of Americans continuing to seek unemployment benefits, which dropped slightly to 4.37 million from 4.39 million the previous week. Wall Street economists had expected the number to increase to 4.4 million.
But some economists think that the recent economic data, which included reports of shrinking home sales and productivity Tuesday, will continue to pour in without some meaningful economic stimulus.
"Until we see an economic stimulus plan that gives us confidence, it's gonna be hard to see our way out of the current downturn," economist Mary Kay Plantes told CBS News Radio.
Economists consider jobless claims a timely, if volatile, indicator of the health of the labor markets and broader economy. A year ago, initial claims stood at 353,000.
The elevated level of new jobless applications is just one of several signs that the labor market has deteriorated rapidly in recent months.
The Labor Department said earlier this month that employers cut a net total of 533,000 jobs in November, sending the unemployment rate to 6.7 percent, the highest in 15 years.
Mass layoffs are taking place in a wide range of industries. Industrial conglomerate Textron Inc. on Tuesday said it has cut 2,200 jobs, while technology services provider Unisys Corp. said Monday it will eliminate 1,300 jobs. Sovereign Bancorp Inc.'s bank unit said last week it is laying off 1,000 employees.
Meanwhile, the Commerce Department reported Wednesday that consumer spending fell for a fifth straight month in November, the longest weak stretch in a half-century, while incomes declined under the weight of massive job layoffs.
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economist
Spending fell 0.6 percent last month, slightly smaller than the 0.7 percent drop that economists had expected.Until we see an economic stimulus plan that gives us confidence, it's gonna be hard to see our way out of the current downturn.
Mary Kay Planteseconomist
Americans' incomes fell by a worse-than-expected 0.2 percent. It was the first decline since July and reflected in part the fact that more than a half-million jobs were cut in November as the recession deepened.
The 0.6 percent drop in consumer spending followed an even larger 1 percent fall in October. However, the steep plunge in gasoline prices, which is actually good news for consumers, made the declines look worse.
Excluding price changes, consumer spending would have dropped 0.5 percent in October and actually risen by 0.6 percent in November. The November increase excluding inflation was the best showing in more than three years.
Still, economists think the overall trend for consumer spending is down, given the problems facing the economy including the longest recession in a quarter century, a severe financial crisis that has cut off access to credit for millions of borrowers and a massive wave of job layoffs.
All of those troubles have left retailers braced for what could be their worst holiday shopping season in decades.
Economists don't think the hard times will end any time soon. The government reported Thursday that the overall economy, as measured by gross domestic product, was contracting at an annual rate of 0.5 percent in the July-September quarter and analysts believe the contraction will accelerated in the current quarter. Some are forecasting that GDP will plunge at an annual rate of 6 percent, which would be the worst showing in 26 years.
Many analysts say GDP will also fall in the first and second quarters next year before beginning a modest rebound in the summer. If that forecast turns out to be accurate, it would make the current recession, which began in December 2007, the longest in the post World War II period.
The economic weakness is helping to keep inflation under control. A price gauge tied to consumer spending fell by a record 1.1 percent in November, the second monthly decline. Excluding the cost of energy and food, the price index was unchanged last month.
Over the past 12 months, consumer prices are up 1.4 percent, the smallest 12-month change since August 2002.
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See all 130 CommentsIt''s starting to look like the fighting in the Congo in some parts of Europe.
Once civil un-rest sets in then British oligarchs can fund rebel groups (left-wing anarchists) that will make what''s left of the prolitariate demand security crack down.
Obama will try to implement his ''stimulas'' plan but it will fail because Wall Street wants the inflation it brings under a fiat-currency monetary-system.
Once that happens, Obama will be known as a 3rd world dictator who supposedly goes off his Keynian instincts of violence and austerity measures on the people.
Why go through with that if all we have to do is follow Larouche''s plan to put the system through bankruptcy re-organization first.
NO MORE BAILOUTS!!!
BAILOUTS ARE THE SET UP FOR PROTESTORS TO RIOT AGAINST!!!
HUH??? How could it possibly have been unexpected? The whole country is going to he!! in a hand basket, but "they" didn''t expect this? What kind of morons write these stories?
Posted by BagdadsHere7 at 08:52 AM : Dec 25, 2008
LOL You are just as ignorant on Christmas as you are every other day. GO BACK TO SCHOOL!!
This works out at spending 250,000 dollars to create each government job. What will each job pay 30,000 per year. This is good economics?
Posted by jowand at 09:36 PM : Dec 24, 2008
It''s absolutely amazing how you folks with a 6th grade education can still walk around and SEMI function in our society. The JOBS created will create OTHER activity in the economy. The folks out here who actually WORK for a living can''t afford to Invest the money in some third world economy! Nope! They can''t get by one week to the next so they go out and SPEND that money. Guess what all you "trickle down" losers? That''s what REALLY drives the economy. You give the working stiff more of the wealth and HE will create MILLIONS and MILLIONS of new jobs because he will BUY!! Now history has clearly shown that if the Working Stiff has a buck some greedy human will be trying to find something to sell him! Sieg Heil!!
Just think how this data is going to look when all the seasonal Christmas jobs are done for the season.
All that greed, isn''t it beautiful [/sarcasm]
Posted by jowand at 09:41 PM : Dec 24, 2008
You poor fascist!! You BLAME the economic conditions on the Democrats to gain Power. You trash the existing system for "Trickle Down", telling people it will IMPROVE the Economy and when it turns out to be a complete and TOTAL bust, you come back and say, don''t blame us NEITHER party can control the economy! Just HOW stupid does a person have to be to buy THIS garbage??
Posted by rudy6543 at 06:26 PM : Dec 24, 2008
Government can''t fix societies problems, either party. Democrats ran Congress for over 40 years and did nothing no health care no nothing, Republican likewise didn''t fix anything. Congress just gave away 700 billion with no rules, no accountability and no idea where the money has gone to. The same bunch of people is in the process of bankrupting S.Security.
This works out at spending 250,000 dollars to create each government job. What will each job pay 30,000 per year. This is good economics?
Consumer Spending Up.
Month sees 0.6 percent uptick as falling gas prices helped boost purchasing power, new data shows.
Annys Shin | 6:01 p.m. ET
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Posted by Hackerpc at 06:58 PM : Dec 24, 2008--
At least he''s WARNING the people after 8 years of denial by morons in the Bush administration.
What you have to understand is that the Bush/Hannity/Limbaugh-Depression is the ''GOOD NEWS''.
The bad news is that at any moment the entire economic activity on planet earth may literly come to a halt!
I suggest you quickly dislodge that peanut you call a brain from between your butt cheeks and read Lyndon Larouche''s analysist of our present predicament.
larouchepac.com
**************
Oh yeah, bad democrats for thinking people shouldn''t live in their cars. Bad democrats for thinking that all people should have access to a toilet, running water, food and healthcare. Evil!
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