We will have a few more months of these scary unemployment numbers (2 million could lose their jobs in December alone) but there is hope that by the summer, most of the dry rot will have been gotten rid of in the economy and job creation will pick up.
It doesn't help if you have to trudge home to the wife and family and inform them that it is not going to be a very Merry Christmas:
Initial claims for state unemployment insurance benefits rose to a seasonally adjusted 586,000 in the week ended Dec 20 from a revised 556,000 the prior week, the Labor Department said. It was the highest since the week ending Nov. 27, 1982.
Analysts polled by Reuters had forecast 560,000 new claims versus a previously reported count of 554,000 the week before.
A Labor Department official said there were no special factors influencing the data and no noticeable impact from severe winter weather in northern parts of the country.
The official also said a number of states had reported increasing layoffs in the auto industry, which has been hit hard by consumers cutting back on their spending in the face of rising unemployment and scarcer credit.
The four-week average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, increased to 558,000 from 544,250 the week before. This was the highest reading since December 1982.
One bright spot is that fuel prices continue to slide despite OPEC's promise to cut production and that consumer spending rose an encouraging .6% in December:
The Commerce Department reported on Wednesday that consumer spending, when adjusted for inflation, rose 0.6 percent in November, its largest gains in two years. The increase followed a 0.5 percent decline in October.
While the unadjusted rate of consumer spending declined 0.6 percent last month, following a 1 percent drop in October, economists suggested that the relative increase in spending was a rare piece of good news for the faltering economy.
“The declines in gasoline prices have been extremely large, larger than anything we’ve seen in the past,” said Dean Maki, chief United States economist at Barclay’s Capital. “That’s providing a lot of spending power to households.”
Gasoline prices have plunged to $1.66 a gallon from their July peak of $4.11 as Americans drove less, construction projects were halted and the global appetite for oil waned in the economic slowdown. Filling up a 15-gallon tank now costs about $25, compared with $60 this summer.
Of course, all bets are off once the economy gets moving again. But for the moment, the price at the pump is at least bearable.