- The Washington Times - Friday, November 7, 2008

CHICAGO | A terrible employment report for October highlighted the urgency of President-elect Barack Obama’s meeting Friday with his economic advisers.

The Labor Department reported Friday morning that the unemployment rate for October was 6.5 percent, its highest level in 14 years. The jobless rate jumped from 6.1 percent in September.

The department also reported that October payrolls shrank by 240,000 jobs. In its revisions for August and September, the department reported that an additional 179,000 jobs had been lost. Altogether, the U.S. economy has lost nearly 1.2 million jobs during the first 10 months of this year. The private sector has lost 1.34 million jobs so far in 2008.

After meeting with his Transition Economic Advisory Board, Mr. Obama will hold his first post-election news conference at 2:30 p.m. EST.

Those attending the meeting include Vice President-elect Joe Biden; Robert Rubin and Lawrence Summers, both of whom served as Treasury secretary in the Clinton administration; former Federal Reserve Chairman Paul Volcker; Robert Reich, secretary of Labor in the Clinton administration; Laura Tyson, President Clinton’s first chairman of the White House Council of Economic Advisers; billionaire investor Warren Buffett, who will participate by telephone; William Donaldson, former chairman of the Securities and Exchange Commission; Richard Parsons, chairman of Time Warner; Eric Schmidt, chairman and CEO of Google; Roger Ferguson, former vice chairman of the Federal Reserve; Jennifer Granholm, governor of Michigan; and William Daley, secretary of Commerce in the Clinton administration.

Mr. Obama, who spent part of Thursday being briefed by President Bush’s top intelligence officer and talking with nine world leaders, will hold a meeting with his transition team of 17 economic advisers, including billionaire investor Warren Buffett, and then publicly tackle bad financial news that has returned with a vengeance since his election Tuesday.

On Thursday, reports of the worst month for retailers in 35 years triggered a 443-point plunge in the Dow Jones Industrial Average that added to a nearly 500-point loss Wednesday to complete the worst two days for the Dow since 1987.

Retailers reported a “simply awful” month for sales in October and forecast a dismal 1 percent growth rate for the critical holiday season, during which most stores normally make about a quarter of their yearly sales.

Mr. Obama’s schedule was announced as he locked down his first major White House staff position when Rep. Rahm Emanuel, an Illinois Democrat and former senior adviser to President Clinton, agreed to become his chief of staff, and Mr. Bush vowed to help his successor navigate the transition of power.

In an emotional South Lawn address to executive branch employees, Mr. Bush warned that terrorists “would like nothing more than to exploit this period of change to harm the American people” and pledged that he, his Cabinet and executive branch employees would do all it could for the incoming administration.

He choked up as he told the crowd that he would be “honored to stand with [them] at the finish line.” Mr. Bush and first lady Laura Bush will host the president-elect and his wife, Michelle Obama, at the White House on Monday. Mr. Bush and Mr. Obama will meet in the Oval Office to discuss the economy and the war in Iraq, while Mrs. Bush takes Mrs. Obama on a tour of the residence.

In Chicago, Mr. Obama spent his second day as president-elect much like the first: He worked out in the morning and then went to meetings, but kept a low public profile.

But unlike Wednesday’s powwow with campaign staff, Mr. Obama’s first round of meetings Thursday were with the nation’s top intelligence officer, Director of National Intelligence Michael McConnell, CIA Director for Intelligence Michael Morell and at least one other career CIA employee.

The intelligence officials met with Mr. Obama at the FBI’s Chicago field office and gave the next president his first briefing on the full range of national security threats facing America. The briefing was delivered in what intelligence officials call a sensitive compartmentalized information facility.

Mr. Obama, like Republican presidential candidate John McCain, had been briefed by Mr. McConnell before the election, but had not seen the equivalent of what Mr. Bush sees six days a week, known as the president’s daily brief.

The range of issues discussed, which the DNI’s office would not discuss, was expected to include terrorist threats, the wars in Iraq and Afghanistan, growing Russian belligerence, tensions in Pakistan, and the issue of detainees at Guantanamo Bay, Cuba.

Throughout the day, Mr. Obama returned congratulatory calls from leaders around the globe, including Prime Minister Kevin Rudd of Australia, Prime Minister Stephen Harper of Canada, President Nicolas Sarkozy of France, Chancellor Angela Merkel of Germany, Prime Minister Ehud Olmert of Israel, Prime Minister Taro Aso of Japan, President Felipe Calderon of Mexico, President Lee Myung-bak of South Korea and Prime Minister Gordon Brown of Britain.

All of those leaders, with the exception of Mr. Olmert, will attend a global economic summit hosted by Mr. Bush.

On Thursday, the Dow closed at 8,695.79, a loss of 4.85 percent. The tech-heavy Nasdaq, meanwhile, lost 47.89 points, or 5.03 percent, and the broader S&P 500 fell 72.94 points, for a loss of 4.34 percent.

Consumers already have pulled back sharply, but a steady loss of jobs threatens to cause an even greater falloff of spending in future months. The Labor Department reported that the number of people continuing to draw unemployment benefits jumped to a 25-year high. The sharp rise in unemployment raised fears that a key jobs report to be released Friday will show devastating numbers.

The Labor Department is expected to announce Friday that as many as 200,000 jobs were lost in October.

Long before the election, Mr. Obama had said the economic crisis would be his first focus and priority.

In announcing his chief of staff, the president-elect emphasized Mr. Emanuel’s “several years in the private sector, where he worked on large and complicated financial transactions.”

“That experience, combined with his service on the committees on ways and means and banking, have given Rahm deep insights into the challenging economic issues that will be front and center for our administration,” Mr. Obama said.

Mr. Emanuel was credited with helping Democrats retake the House in 2006 during his chairmanship of the Democratic Congressional Campaign Committee, and he rose to become the fourth-ranking House Democrat. He was often mentioned as a future House speaker.

Some Republicans criticized Mr. Obama’s selection. The Republican National Committee drew attention to Mr. Emanuel’s fearsome, take-no-prisoners reputation, which earned him the nickname “Rahmbo.”

“Rahm Emanuel is a partisan insider who played a lead role in breaking Washington,” RNC spokesman Alex Conant said. “Our nation will be ill-served if Obama runs the White House the way ‘Rahmbo’ ran the Democratic Congress.”

House Minority Leader John A. Boehner, Ohio Republican, called it an “ironic” choice, given Mr. Obama’s promises to transcend partisanship.

Mr. Emanuel sought to extend an olive branch to the House Republicans, who he said “serve with dignity, decency and a deep sense of patriotism.”

“We often disagree, but I respect their motives,” Mr. Emanuel said. “Now is a time for unity, and, Mr. President-elect, I will do everything in my power to help you stitch together the frayed fabric of our politics, and help summon Americans of both parties to unite in common purpose.”

Sen. Lindsey Graham, South Carolina Republican and one of Mr. McCain’s closest allies in the presidential campaign, said the Emanuel pick was “wise.”

“Rahm knows Capitol Hill and has great political skills. He can be a tough partisan but also understands the need to work together,” Mr. Graham said.

Patrice Hill contributed to this report. Jon Ward reported from Washington.

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