- The Washington Times - Thursday, February 26, 2009

Three key indicators of the health of the nation’s economy — the numbers of unemployed Americans getting benefits, how many orders for durable goods are received by factories, and new-house sales — painted a darkening picture of a worsening recession Thursday.

The number of people who signed up for jobless benefits increased to a surprising 667,000 for the week ended Saturday, much higher than the 625,000 whom analysts expected to apply and far more than the 631,000 who signed up the previous week, the Labor Department reported.

Moreover, those Americans who collected unemployment claims for more than a week jumped to 5.1 million from 4.99 million the previous week, a record going back to when the agency started keeping records in 1967, when the Vietnam War was on, Lyndon Johnson was president, and the young worshipped the music and style of the Beatles.

At the same time Thursday, the Commerce Department reported that the number of orders received by factories for durable goods such as automobiles, appliances, computers and other items expected to last at least three years fell by a whopping 5.2 percent in January. That was way beyond the 2.5 percent that analysts had expected.

The drop in factory orders for a record sixth successive month was evident across the board, with orders declining for autos, machinery, computers, metal products, electrical equipment and household appliances, the agency said. Some of those items are manufactured for new houses, but the housing market virtually is dead.

The previous record for declining orders was four consecutive months in 1992, when the country was emerging from recession and Bill Clinton started his presidency.

As if to confirm the weakness in the housing market, the sale of new homes nosedived by 10.2 percent in January to an annual pace of 309,000, the worst showing since a record set in 1963, when John F. Kennedy was president for most of that year and the Cold War with the then-Soviet Union was at its height. It went through the all-time monthly low set in the recession year of 1981, during Ronald Reagan’s first term as president.

Taken together, these three indicators coupled with the financial crisis faced by 19 major banks that are undergoing strict Treasury Department examination to determine their viability mark the worst economic downturn in more than 70 years.

The Obama administration is trying to attack the recession with a $787 billion stimulus package intended to save or create 3.5 million jobs over two years, a plan to stabilize heavily indebted financial institutions, and expenditures of at least $75 billion to keep homeowners on the cusp of foreclosure in their homes.

Economists and the federal government expect that the recession will reach its lowest point during the first half of this year and to begin to turn in the summer. Federal Reserve Chairman Ben S. Bernanke predicted in congressional testimony earlier this week that the country will be out of the recession by next year.

But, as President Obama has said more than once, things are likely to get tougher before they get better.

The figures for initial jobless claims and those for Americans receiving continuing unemployment benefits reflect the determination of big-name corporations to cut back workers to prevent a further erosion of their earnings. Hundreds of thousands of people have been dismissed from their jobs in the past few months alone.

In the latest such move, JPMorgan Chase & Co., the giant bank, announced Thursday that it will lay off 12,000 workers as part of its absorption of another bank, Washington Mutual, which it bought last year in a bid to save it from bankruptcy.

General Motors Corp., which has received tens of billions of dollars in bailout money from the federal government and has asked for more, recently announced that it will dismiss 47,000 more workers as it restructures to ensure its existence. Chrysler LLC, which also has received federal money, said it will fire 3,000 more workers.

The destructive nature of the housing market not only has lessened demand for the materials needed to build new homes but has forced construction laborers to look elsewhere for work, if they can find it.

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