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January 8th, 2009
11:39 AM ET

Financial Dispatch: Jobless claims drop

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Andrew Torgan
CNN Financial News Producer

The number of Americans filing for first-time unemployment benefits dropped sharply last week to a three-month low. Initial filings for state jobless benefits fell 24,000 to 467,000 for the week ended Jan. 3. That’s the lowest level since the week ending Oct. 11, when claims were at 463,000. However, the number of people continuing to collect benefits rose by 101,000 to 4.61 million - the highest level since November 1982. The greatest number of layoffs were reported in Wisconsin, Missouri and Kansas. On Friday, we’ll get the government’s monthly employment report for December, and economists are expecting losses of more than 500,000 jobs.

If retailers were hoping for a respite from a protracted slump in monthly sales, it didn't happen in December. Most of the nation's major chains report a key monthly sales figure today, and the early results are clearly disappointing. Wal-Mart - the world's largest retailer –posted lower-than-expected December sales and cut its fourth-quarter profit forecast. Sears posted a more than 7% drop, while Gap saw sales tumble 14%. Macy’s, meanwhile, reported a 4% drop and said it will close 11 underperforming stores.

Stocks opened lower today as weak sales results from Wal-Mart and other retailers combined with jitters about Friday's big jobs report, sparking an early selloff.

Gas prices are up 3.5 cents to $1.762 a gallon - the 9th consecutive increase. The current national average is now $2.35 below the record high price of $4.114 that AAA reported on July 17, 2008. Two states have regular unleaded gas prices of $2 and higher. 48 states and the District of Columbia have regular unleaded gas prices below $2. The most expensive gas in Alaska ($2.531), while the cheapest is in Wyoming ($1.439)

Oil prices are down to around $41/barrel. Crude tumbled more than 12% Wednesday after a government report showed a bigger-than-expected surge in crude oil and gasoline stockpiles last week, reflecting the continued drop in demand. Prices have fallen more than $100 per barrel in the last six months.

Venezuela's Citgo Petroleum said Wednesday that it has reinstated a program that provides discounted home heating oil to lower-income residents in U.S. communities, one day after it was suspended.

And as President-elect Barack Obama prepares to move into the White House, real estate Website Zillow.com has calculated a value for the presidential residence were it actually a home that could be bought and sold. That estimated value - just over $308 million - would make it the most expensive residence in the United States. Were you to take out a standard 30-year, fixed-rate mortgage on the White House (assuming 20% down and a 6% rate), the monthly payment (including principal and interest) would be $1.48 million. So if Obama were to spend 30% of his gross income as president on housing, that would total $133,333 per year, or just over $11,000 per month - falling short by more than $1 million on the monthly payment.

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Filed under: Andrew Torgan • Economy • Finance • Unemployment
soundoff (6 Responses)
  1. Annie Kate

    The over 40 crowd does have a tougher time finding a new job after being laid off – companies like to hire new graduates – they know the latest technology and they don't cost as much. By the time you hit your 40s and 50s your salary expectations have grown with your age and your responsibilities. And while companies are not suppose to discriminate on the basis of age, they do, but they frame it as qualifications or some other quality as long as its not age. That is what makes all these layoffs and off-shoring so difficult; those who are over 40 but no where near retirement realize that they have a long slough ahead of them and that to get another job they are going to have to lower their living standards quite a bit to compete at salary level. Companies should remember though that you get what you pay for and a lot of times paying more for experience will cost you less in the end.

    January 8, 2009 at 4:54 pm |
  2. Gene Penszynski from Vermont

    The bottom line is that the ranks of the unemployed are incresign drmatically in numbers every month. The government 'jobless' do not by any means reflect the actual number of people either part time employed or ones that have simply had their benefits expire. There are a lot more poeple out there that are barely surviving or are out of work completely than any of these government numbers suggest.

    I'd be willing to bet that the number of actual under and UN-employed exceed 10% right now !!!!

    January 8, 2009 at 3:18 pm |
  3. Marcia, Warren MI

    Sure the jobless rate has dropped, but those figures on are based on people who are receiving benefits or are filing for them. No one seems to remember that there a lot of people who are no longer receiving benefits because they have run out. Why doesn't someone do a story on the new poor those who are forced to go on public assistance because they can't find work because they are too old to be accepted into the new youth oriented workforce, I'm talking about those in their late forties or early 50s, young enough to work, but considered to be too old by the present working community.

    January 8, 2009 at 1:52 pm |
  4. Ted Scaldwell

    If jobless claims are dropping, where did Pres-elect Obama come up with the possibility we might hit double-digit unemployment? Are there any economists without ties to his team that would agree?

    January 8, 2009 at 1:32 pm |
  5. Mary V., Salt Lake City, UT

    Yes, Yes, things look dire. However, when you consider that ONLY ...4.61.... Million are taking unemployment benefits and you consider that we have about 350 million Americans...... ITS not all doom and gloom.

    All of us, shopped less this Christmas. Even though the majority of Americans are employed, we have been cautious. For too long, we have lived 'high on the hog' and now with mounting National debt, two wars, growing unemployment, home foreclosures, etc., we are being cautious and perhaps even frugal!

    We CAN and we WILL return to prosperity. But I hope that we will take a good hard look at how we live our lives, our finances and what we really value and make some significant changes. We can not live in debt! Americans need to learn to save for retirement, and to delay gratification.

    HOPE WINS EVERY TIME.

    January 8, 2009 at 12:21 pm |
  6. Joanne, Solvay, NY

    Unemployment percentages only reflect those applying and receiving unemployment insurance benefits. Those who have exhausted their benefits are not reflected in the figures. I guess the numbers in that category are staggering.

    January 8, 2009 at 12:18 pm |