Jobless Claims Hit 16-Year High Amid New Fears of Deflation
New economic indicators underscore not only that a recession is already occurring but that it's a deep one. One sign came from the Labor Department's unemployment benefits claims, which spiked last week to the highest level in 16 years—back when the U.S. economy was coming out of a recession. The new figure belied predictions that claims were going to decrease. The unemployment rate in October was 6.5 percent, and analysts expect it to reach 8 percent by the end of 2009.
Meanwhile, data released yesterday showed that the housing market sank to historic lows in October. The construction of new homes fell to the lowest level since the government began tracking figures in January 1959—a 38 percent decline from the same time last year. But given the odds against the market—lowered demand, too many homes for sale, and builders' difficulty in securing financing against a backdrop of a tough credit market and climbing foreclosure rates—it's hardly surprising.
Another glum sign: the consumer price index. It fell 1 percent in October, the biggest plummet since monthly data began to be tracked in 1947. A lot of that is because of the falling price of oil, which dropped below $50 a barrel today. But even when you take out the unstable indexes of food and energy, the news isn't good. The "core" price index—drawn from the price of other goods like clothing and cars—fell 0.1 percent in October, which is the first time it has dropped over the course of a month since 1982.
All that bad data helped drive down the stock market. The Dow fell to its lowest point in almost six years yesterday, closing below 8000 for the first time since 2003. Shares also fell at the open today. Meanwhile, markets abroad were shaky, with the Tokyo Nikkei stock average tumbling nearly 7 percent, making its loss this year nearly 50 percent, and the Moscow exchange was forced to halt trading for an hour when shares fell 7.6 percent.
But some good news came for one country at least: Iceland, which had been pleading for a bailout plan, has received the first $827 million of a $2.1 billion loan from the International Monetary Fund, and Nordic countries have pledged to loan it another $2.5 billion. The IMF also has announced that it will bail out Hungary, Pakistan, and Ukraine, while Turkey seems very likely to be next on the list.
Reader Comments
Joblessness in the U.S.
Stop taking everything the media tells you as the gospel truth! The actual numbers of unemployed people in the U.S. means absolutely nothing. What's the percentage of legal citizens of the U.S.? That's the number that counts.
Want to fix this? Every issue in the country / world is tied in some way to every other issue. In this case, there are direct correlations to illegal aliens working in our country & the welfare / enabling system.
STOP providing free health care, EBT cards, housing, education & all of the rest to illegal aliens. They WILL go home. That will open up literally millions of jobs in this country! There are some that say, 'but they only take the jobs that Americans won't do'. So. If those same Americans want to eat, then they had better take those jobs!
Right On! Buy American
Years ago because we wanted to buy cheap so we started buying items made in China and other countries and there went the factory jobs of Americans. Greedy corporate American just thinking of making more money was more than glad to send our jobs overseas with the excuse they could not compete with foreign made products. Now, we need to buy American made products, and demand that all products must be made in American, by Americans. Do not buy if they are foreign made. If you do, you have no right to complain when you can't find a job. Politicians say this is not the time to point fingers or place blame but they have to admit the Bush administration and the Republican Party have screwed up our nation and it will take years to turn this financial crisis around. Both Parties are to blame because neither one made sound decisions to benefit the nation. We need to get rid of the old fogies who are entrenched in croynisism and game playing.
Consumer Society
How ironic that our leaders would have us believe that, although Americans are living beyond their means and are heavily in debt, the way out is to go out and BUY! What we should have done and can still do is BUY AMERICAN. Although much of our manufacturing has gone overseas, some things are still made in America. Support local cottage industries and manufacturers. If an organized commitment to support American made items is made, and brought to the attention of our legislators, we could make a difference.
By the way, Abraham Lincoln, at a time of huge national debt (Civil War and building of the transcontinental railroad simultaneously) insisted that all materials used in the railroad be produced in America, thus energizing the mining, steelmaking, and manufacturing sectors.
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