The number of Americans filing first- time claims for unemployment benefits fell last week to the lowest since January, a sign the labor market is deteriorating more slowly as the economy emerges from the recession.
Applications fell by 33,000 to 521,000, lower than forecast, in the week ended Oct. 3, from a revised 554,000 the week before, Labor Department data showed today in Washington. The total number of people collecting unemployment insurance dropped in the prior week to the least since March.
While the figures indicate improvement, government data last week showed more job cuts than forecast for September and a rising jobless rate. President Barack Obama pledged to “explore any and all additional measures” to spur growth, as last week’s report underscored that gains in consumer spending may be hard to sustain once stimulus programs expire.
“The pace of job losses has slowed,” Steven Wood, president of Insight Economics LLC in Danville, California, said before the report. Even so, he said, mounting unemployment will mean “sluggish economic growth over the next year.”
Economists forecast weekly claims would drop to 540,000 from a previously reported 551,000, according to the median of 45 projections in a Bloomberg News survey. Estimates ranged from 530,000 to 560,000.
Continuing claims dropped by 72,000 to 6.04 million in the week ended Sept. 26 from 6.11 million in the prior week.
Nationwide, the number of long-term unemployed people hit a record 5.4 million in September, or 35.6% of the jobless.
The U.S. House approved $82.8 billion for federal nutrition programs ranging from food stamps to school lunch on Wednesday, including a plan to compensate poor families for lunches missed during flu epidemics.
The money is part of a $121 billion funding bill for the Agriculture Department and the Food and Drug Administration for the fiscal year that began Oct 1. Nutrition spending would rise by $6.6 billion from fiscal 2009, a reflection of the recession. [Pure socialism]
Measured in euros, U.S. per capita GDP is down 25% since 2000. Bond buyer Bill Gross of the Pimco fund summed up the situation nicely in a recent CNBC interview. Asked whether low interest rates will weaken the dollar, the influential allocator of global capital said: "I think that's part of the administration's plan. It's obviously not announced—the 'strong dollar' is always the policy, so to speak. One of the ways a country gets out from under its debt burden is to devalue."
Investors have been playing this weak-dollar trade for years, diverting more and more dollars into commodities, foreign currencies and foreign stock markets. This is the Third-World way of asset allocation.
Corporations play this game for bigger stakes, borrowing billions in dollars to expand their foreign businesses. As the pound slid in the 1950s and '60s and the British Empire crumbled, the corporations that prospered were the ones that borrowed pounds aggressively in order to expand abroad. Though British equities rose in pound terms, they generally underperformed gold and foreign equities. At the end of empire, the giant sucking sound was from British capital and jobs moving offshore as the pound sank.
From the euro perspective, the S&P peaked at 1700 in 2000, finally re-attained 1100 in the 2007 bubble, fell below 600 in March and now stands at 700 (see nearby chart). With most of the market capitalization of U.S. stocks held by Americans, the dollar devaluation has caused a massive decline in the U.S. share of global wealth.
The U.S. Commerce Department launched an investigation Wednesday into whether to impose antidumping and countervailing duties on imports of certain seamless steel pipes from China.
The State of Illinois' pile of unpaid bills has grown to a record-breaking $3 billion. The comptroller reported corporate income tax receipts down $77 million for July through September; sales tax receipts, down $244 million; personal income tax receipts, down $251 million.
It appears destined for a taxpayer bailout in the next 24 to 36 months,” said Edward Pinto, a consultant who was chief credit officer from 1987 to 1989 for Fannie Mae.
In a sign that more banks are under great pressure from the recession, 34 financial institutions did not pay their quarterly dividends in August to the Treasury on funds obtained under the Troubled Asset Relief Fund (TARP). The number almost doubled from 19 in May when payments were last made, and also raised questions about Treasury's judgment in approving these banks as "healthy," a necessary step for them to get TARP funding.
"Perhaps the Treasury made assumptions that were a little bit too rosy," says Walter Todd, who invests in banks at Greenwood Capital. "My question is also whether the Treasury is staffed adequately to handle this tremendous undertaking."
The U.S. government ended its 2009 fiscal year with a deficit of $1.4 trillion, the biggest since 1945, the Congressional Budget Office reported.
The deficit amounted to 9.9 percent of the nation’s economy, triple the size of the shortfall for 2008.
The nonpartisan CBO said yesterday the government was squeezed on both sides of the budget ledger in the fiscal year that ended Sept. 30. Tax revenue fell by $420 billion, or 17 percent, to the lowest level in more than 50 years.
Individual income taxes, the biggest source of tax receipts, fell by 20 percent, the agency said. Corporate income taxes dropped by 54 percent, reflecting the slow economy. At the same time, federal spending rose by 18 percent, the CBO said. About half of the spending increase, $245 billion, was driven by the costs of bailing out the financial industry and taking over mortgage financiers Fannie Mae and Freddie Mac.
The spending increases and tax cuts included in the economic stimulus package approved in February added almost $200 billion to the 2009 deficit, the CBO said.
After three years of major increases in federal Pell grants for needy college students, President Obama aims to boost the aid further with $40 billion in funding over the next decade. But even that influx might not ensure that the grants will recover and sustain the purchasing power they once held.
Experts agree on the reason: soaring college costs.
In the late 1970s, the maximum Pell award covered more than two-thirds of tuition and fees for a public four-year university. In the 1980s, it covered roughly half of such expenses. In the last school year, it covered about a third.
Used vehicle prices shot to an all-time high last month, spurred by falling inventories, according to a closely watched barometer of the second-hand car business.
For those in the market for a used car, that's not necessarily bad news, said Tom Webb, chief economist at Manheim Consulting, which produces the index of the used car market. That's because the value of trade-in vehicles are fetching record prices, he said.
But those buying their first car or who aren't looking to trade in a vehicle will find themselves stuck paying the higher price, Webb said.
The Manheim Used Vehicle Value Index rose 6.9% in September to a record high of 118.5. The index is adjusted for vehicle mix and seasonality. A value of 100 represents used vehicle prices in January 1995.
The index reflects the wholesale, or trade-in, value of vehicles. But Webb said retail prices move "pretty much in lockstep" with wholesale values.
The main driver behind higher used car prices is falling wholesale vehicle supply, Webb said. This summer's wildly popular cash for clunkers program sent new vehicle sales soaring, taking dealers by surprise and clearing out inventories.
Even though new car sales dropped off in September, auto factories struggled to catch up and inventories remained low.
In addition, he blamed falling vehicle turnover from rental car companies, many of whom have taken a beating in the economic recession.
Home sellers cut their asking prices by a total of $28.4 billion to attract buyers as the real estate recovery stalled, Trulia Inc. said.
The average discount was 10 percent as of Oct. 1, the San Francisco-based real estate data provider said today. Homes listed for more than $2 million were cut the most, with owners taking an average of 14 percent off the original price. Luxury homes accounted for 25 percent of all of the reductions.
Sales of existing U.S. homes unexpectedly fell in August for the first time since March, according to the National Association of Realtors, signaling the recovery will be slow to gain speed. The median price dropped 12.5 percent from August 2008.
Consumers have to be slashing the prices of the homes they list,” Pete Flint, chief executive officer of Trulia, said in an interview. There’s a “significant inventory” of homes for sale. “You’re still going to see further price declines before the market stabilizes in 2010.
Half of the 10 states with the highest percentage of discounted homes are in the Northeast: Massachusetts, Rhode Island, Connecticut, New Hampshire and New Jersey.
A third of residences for sale in those states were reduced at least once, Trulia said. New York, California and Florida accounted for 35 percent of the total value of price cuts nationally. In Nevada, Idaho, Arizona, Wyoming, Hawaii, Utah and California, sellers have dropped an average of 13 percent off the original price, according to Trulia.
Inventories at U.S. wholesalers dropped in August for a 12th consecutive month, clearing the way for a pickup in orders as sales improve.
The 1.3 percent decrease in stockpiles was larger than anticipated and followed a revised 1.6 percent drop in July, figures from the Commerce Department showed today in Washington. Wholesale inventories have had the longest series of declines since records began in 1992. Sales climbed 1 percent, the biggest gain since June 2008.
Distributors will likely increase bookings after companies drew down inventories at a record pace in the first half of the year. The gains may give the world’s largest economy a boost in the early stages of a recovery as American factories rev up assembly lines to prevent stockpiles from dwindling even more.
[This is truly unbelievable, this is the same man that is extending the war in Afghanistan into Pakistan. It shows you how much control the Illuminati has. Next we will read the President’s dog has been made ambassador to Kenya.] U.S. President Barack Obama was named the recipient of the 2009 Nobel Peace Prize on Friday: "For his extraordinary efforts to strengthen international diplomacy and cooperation between peoples."
The announcement came early this morning, and comes as President Obama is considering how much to increase troop levels in the war in Afghanistan.
As the sky hinted at dawn, U.S. soldiers went hunting for Taliban in the Arghandab Valley. They had satellite-linked monocles to display the locations of platoons. They could summon an aerial drone to buzz overhead with a surveillance camera. They could call on Kiowa helicopters for search-and-destroy missions.
On this mission, however, one of their most valuable assets was an informant: a farmer with a taste for opium.
"It all came down to one guy who said, 'The Taliban stole my motorcycle.' He was high, and he was pissed, and he give us the tip on where to find them," said Sgt. Kenneth Rickman, 34, of Vandalia, Ill.
The U.S. trade deficit unexpectedly narrowed in August as exports climbed to the highest level of the year and oil imports plunged.
The gap fell 3.6 percent to $30.7 billion from a revised $31.9 billion in July, the Commerce Department said today in Washington. A rebound in auto making contributed to a jump in exports to Canada, while a drop in the number of barrels of petroleum bought abroad swamped an increase in fuel prices.
More than $2 trillion in government stimulus programs are reviving demand from Asia to Europe, ensuring American factories benefit from growing sales overseas as the dollar falls. Gains in production and the need to replenish depleted inventories mean imports will probably also grow in coming months.
"The credit crisis has forged an even larger gap between the rich and poor, though it might not last for long," writes Ian Mathias in today's issue of The 5. "The richest 10% of Americans made at least $138,000 each this year, according to Census data released last week. That's a record high 11.4 times the average income for the opposite end of the spectrum: the poverty line around $12,000. Pre-crisis multiples were closer to 11.2.
"The middle class is getting credit crunched too. The median household income has fallen $1,860 over the last year - wiping out a decade of slow gains - to $50,303.
"But if history is any guide, this trend may be near its peak. At present, about a quarter of America's total income is earned by 1% of its population (amazing, eh?). That level has only been attained once in US history - ironically, 1928, right around the start of the last economic depression. What followed then was a 50-year trend in the other direction.