Nearly 5 million are getting unemployment benefits

Associated Press

WASHINGTON – The number of laid-off workers receiving unemployment benefits has jumped to an all-time high near 5 million while new jobless claims remain well above 600,000. Both figures were worse than expected and new projections from the Federal Reserve show unemployment rising for the rest of this year.

The Labor Department reported Thursday that the number of people receiving regular unemployment benefits rose 170,000 to 4.99 million for the week ending Feb. 7, marking the fourth straight week those receiving benefits have been at a record level on data going back to 1967.

The continuing claims figure also was significantly above the year-ago level of 2.77 million and underscored the difficulty people are having in this recession finding another job once they are laid off.

An additional 1.5 million people are receiving benefits under an extended unemployment compensation program approved by Congress last year, bringing the total number of people receiving unemployment benefits to 6.54 million for the week ending Feb. 7.

"The labor market is in disarray," said Mark Zandi, chief economist at Moody's Economy.com. It's possible that job losses for all of February could total between 700,000 and 750,000 based on what weekly claims have done so far this month, he added.

Employers slashed a net total of 598,000 jobs in January, the most since 1974.

In other economic news, wholesale inflation surged unexpectedly in January, according to the Labor Department. Wholesale prices jumped 0.8 percent last month, the biggest gain since July and well above the 0.2 percent increase that economists expected.

The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping 15 percent, the biggest gain in 14 months. Even outside the volatile food and energy sectors, wholesale prices showed a bigger-than-expected increase, rising by 0.4 percent.

The New York-based Conference Board said its January index of leading economic indicators rose 0.4 percent, the second straight monthly gain. Economists expected no change in the index, which forecasts economic activity for the next three to six months based on 10 economic components, including stock prices, building permits and initial claims for unemployment benefits.

The Conference Board said the single biggest boost to the index was the real money supply. The government's effort to address the credit crisis has put more money in circulation. Other positive factors were the interest rate spread, an index of consumer expectations, and manufacturing orders for non-defense and consumer goods. Unemployment claims and building permits were among the biggest drags.

On Wall Street, stocks fell in afternoon trading. The Dow Jones industrial average lost more than 30 points, and broader indicators also slid.

New applications for unemployment benefits totaled 627,000 last week, the same as the previous week, according to the department. But that was still more than the 620,000 claims economists expected.

It also remained near the 631,000 claims filed three weeks ago, which was the highest tally since October 1982, when the economy was emerging from a steep recession, though the labor force has grown by about half since then. A year ago, initial claims stood at 342,000.

The four-week average for claims rose to 619,000 last week, up from 608,500 the previous week which was the first time the figure had topped 600,000 during the economic downturn.

By MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer – 56 mins ago
The cascade of layoff notices in recent weeks has heightened concerns about the current recession, already the longest in a quarter-century.

Goodyear Tire & Rubber Co., said Wednesday it will cut nearly 5,000 jobs, or almost 7 percent of the biggest U.S. tire maker's work force, this year after it posted a fourth-quarter loss and revenue sank 21 percent. The cuts follow the elimination of about 4,000 jobs in the second half of last year.

General Motors Corp. and Chrysler on Tuesday filed plans with the government more than doubling their request for aid to a total of $39 billion and announced plans for thousands more job cuts. GM alone said it would cut 47,000 jobs globally by the end of the year — 19 percent of its work force, and Chrysler said it will cut 3,000 more jobs.

The Fed released a new economic forecast on Wednesday that reduced its growth forecast for 2009 and increased its unemployment rate projections. The new forecast predicts that unemployment will hit between 8.5 and 8.8 percent this year, up from the current level of 7.6 percent.

"The economy faces obstacles that are likely to work against a strong rebound of growth over the next several quarters," Dennis Lockhart, president of the Federal Reserve Bank of Atlanta and a voting member of the Fed's policymaking arm, said Thursday.

"Those obstacles include credit markets not yet returned to healthy functioning, a housing market still weighed down by an excess supply of homes for sale and low business and household confidence," he said in a speech in Alabama. "None of these is likely to turn around quickly."

President Barack Obama pointed to the deteriorating economy to win quick passage of an $787 billion economic stimulus program which he signed into law this week. On Wednesday, Obama unveiled a $75 billion program aimed at halting the surging level of mortgage foreclosures in the wake of the worst slump in housing in decades.

For the week ending Feb. 7, the states with the largest increases in jobless applications were Kentucky and Arkansas, which blamed the jumps on rising layoffs in the mining, trade and manufacturing industries. The biggest decreases were recorded in California and Tennessee, which reported fewer layoffs in the construction, trade, service and manufacturing industries.

Citizen Stimulus and Bailout Committee

"Stimulus", "bailout", whatever they call it, it is going to cost us a pretty penny (plus interest). Wouldn't we have a wise and "transparent" government if they were to incorporate a committee of citizens in various industries across the country to audit and evaluate who and how regarding stimulus and bailout? After all, it is the taxpayers' money.

In the circumstance of the auto bailout, wouldn't it be prudent that they incorporate an actual audit of those companies receiving consideration for the money? Or are they just going to take the executives at their word.

The actual $700 billion bailout (TARP) was supposed to receive an audit of sorts in early December. But, no matter where or how I searched, I could not find any specifics on the actual grade, review, audit, or otherwise. So, what has become of that money? Shouldn't we be privy to that information, since it is our money (plus the interest of at least 5% that we will owe some foreign country, most likely China)?

"House Speaker Nancy Pelosi touted the notion of a 'car czar' to supervise an auto industry bailout, saying Tuesday that Big Three executives haven't adapted well to changing conditions." -- December 9, 2008, Associated Press

Without and audit, how does Congress expect to know how much total taxpayer money will be needed to help General Motors Corp. and Chrysler LLC. to actually survive. After all, they are telling Congress that they need "a total of $14 billion to $15 billion to survive through early 2009". What happens after that?

"Dec. 16 (UPI) -- Stakeholders in the U.S. auto industry must show they're willing to sacrifice if assistance funds are to be allotted, a White House spokeswoman said Tuesday." -- UPI.com, Business News, December 16, 2008

Sure, they should make sacrifices, but what do they mean by "show they're willing to sacrifice"? Does that mean that they have to take business class airfare? Or does that mean that they have to drive themselves in their own brand of car instead of taking a limo? When you are talking about executives that "haven't adapted well to changing conditions", what are they going to consider change and sacrifice, versus what actually needs to be accomplished in our reality.

"(If) we're going to use taxpayer financing to assist the automakers, all stakeholders are going to have to come to the table and be willing to show that they are capable and willing to make really tough decisions about the way forward," spokeswoman Dana Perino said. "(We) need them to become viable, competitive firms in the future, and in order to do that, concessions are going to have to be made by stakeholders." -- UPA.com, Business News, December 16, 2008

When there is a Washington machine committee put together to evaluate this issue of "concessions" and "sacrifice", are they really living in reality enough to evaluate the issue? Or would it be more prudent to have some actual citizens involved in this process...people who are in various working industries and conditions around the country? After all, it is our (the taxpayers') money.

"House Speaker Nancy Pelosi says Democrats are preparing a massive economic recovery bill in the range of $600 billion.

It would blend immediate steps to counter the slumping economy with longer term federal spending on infrastructure like energy efficiency projects.

The California Democrat told reporters that economist Mark Zandi has recommended to Democrats an economic stimulus in that range -- including $400 billion in infrastructure and $200 billion for tax cuts.

Pelosi says

Capitol Hill Democrats

are already "hard at work" writing a stimulus measure to pass next month. It's expected to combine tools like tax cuts and help to states suffering from big budget deficits with infrastructure projects like road and bridge repairs." -- The Associated Press, December 16, 2008 (note: italics added)

If you are not worried about future ramifications of all of these "stimuli", you should be. If it were as easy as just printing more money, that would be easy and we would not have these recessionary, depressionary, devaluationary, deflationary concerns. However, in the end, the buck stops with you and I...literally. In the end, since the money is coming from you and I, wouldn't you rather see a committee of folks who are a part of the various working industries around the country, and not just those who are a part of the Washington D.C. system?