View Full Version : Fed sees country lurching deeper into economic despair, driving up unemployment

mick silver
20th November 2008, 14:53
WASHINGTON (AP) - Pounded by a fierce financial crisis, the country is sinking deeper into economic despair that has pushed the number of newly laid-off workers to a 16-year high, with problems likely to stretch well into next year.

With economic troubles cutting into customers' appetites, cost-cutting businesses dropped the ax harder.

New claims filed for unemployment insurance zoomed last week to 542,000, the highest since the summer of 1992, when the nation was recovering from a recession, the Labor Department reported Thursday. The latest news on the crucial jobs market was worse than analysts expected. They had forecast a small decline in claims.

Meanwhile, the number of people continuing to draw jobless benefits climbed to more than 4 million, the highest in just over a quarter-century. Those figures partly reflect growth in the labor force, which has increased by about half since the early 1980s, but nonetheless underscore the difficulties of people trying to find work.

Against this backdrop, the White House signaled Thursday that President George W. Bush would sign legislation pending in Congress to extend unemployment benefits.

The Senate is expected to take up a bill this week, already passed in the House of Representatives, that would extend unemployment insurance for those whose benefits have run out. The Senate vote could occur as early as Thursday night and would require support from 60 senators to pass.

White House press secretary Dana Perino says Bush is "always concerned" when people lose their jobs and is eager to help ease their economic situations.

Meanwhile, there were new efforts afoot on Capitol Hill to provide financial help to the tottering U.S. auto industry before lawmakers quit for the year. Aides to a bipartisan group of auto-state senators say a compromise to speed emergency loans to Detroit's Big Three car makers had been reached. It was unclear, however, whether the compromise would be embraced by a reluctant Senate.

On Wall Street, stocks seesawed. The Dow Jones industrials were up around 75 points in early afternoon trading Thursday, after bouncing around between positive and negative territory earlier in the session. Stock markets in Europe and Asia slid, a day after the Dow lost 427 points, or about 5 percent, to 7,997 its lowest close since March 2003.

Another report, from the Conference Board, showed the economy's health worsening in October. Its forecast of economic activity dropped a bigger-than-expected 0.8 percent.

The latest grim economic news follows a gloomy outlook from the Federal Reserve.

Despite a flurry of bold government actions, including $700 billion financial bailout package now being rolled out by the Treasury Department, financial and economic problems rage on.