December 24th, 2008
10:34 AM ET

Financial Dispatch: Economic Stats Mostly Bleak

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/images/12/16/art.market.anon.jpg]
Gene Bloch
Managing Editor
CNN New York

There is no sugar coating it, today’s economic news is mostly bleak. The number of people filing jobless claims for the first time jumped 30-thousand last week to 586-thousand, a new 26-year high. Any number above 400-thousand is a sign of a troubled economy. As jobs weaken, incomes decline. Personal income in November fell 2-tenths of one percent, and spending was down 6-tenths of one percent, the fifth straight monthly decline. Durable goods orders fell 1% in November, not quite as bad as expected.

One bright spot: mortgage rates. The average 30-year fixed rate as tracked by the Mortgage Bankers Association fell to 5.04% last week, the lowest level since 2003, when the rate bottomed out at 4.99%. Lower rates triggered a surge in applications and refinancing. They’re at low levels but we’ll take it.

A short trading today on Wall Street today this Christmas Eve. The action ends at 1p, there is no trading tomorrow of course, and a full day is set for Friday.

Crude oil prices this morning are trading below $38 a barrel, and gas prices meanwhile have declined a fifth straight day. A gallon of regular unleaded is at $1.655 ($1.66 for graphics) as measured by AAA. Despite that decline, AAA predicts that 1.4 million fewer holiday travelers will hit the road this year, the first decline in holiday travel since 2002. And the Transportation Department reports Americans drove 100 billion fewer miles between November 2007 and October 2008.

Is this a permanent shift in the way people drive, or just a temporary speed bump? That’s today’s Energy Fix.

Starbucks is moving to cut costs in its 401(k) program, but unlike other companies it will not suspend matches entirely. The company told employees 401(k) matches will shift from being based on length of employment to being based on how well the company does at the end of 2009.

The Bernard Madoff scandal has taken a terrible turn. On Tuesday, Thierry de la Villehuchet, a hedge fund adviser and investor whose firm said he lost $1.5 billion investing with Madoff, was found dead in his New York office, an apparent suicide according to police. The NYC medical examiner is expected to release autopsy results as early as today.

Filed under: Bailout Turmoil • Economy • Gene Bloch
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