April 23rd, 2009
02:00 PM ET

Financial Dispatch: Jobless claims keep climbing

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Andrew Torgan
CNN Financial News Producer

More troubling news on the unemployment front today... the number of Americans filing initial claims for jobless benefits increased last week while the number of people continuing to claim benefits set yet another record high.

First-time claims for unemployment insurance rose by 27,000 to 640,000 from the previous week revised figure of 613,000. And the number of people receiving benefits for one week or more rose by 93,000 to 6,137,000 million. That’s the highest number on records dating back to 1967.

Earlier this month, the government reported that 2 million jobs have been lost since the beginning of 2009 through March, bringing the nation's unemployment rate to the 25-year high of 8.5%.

Home sales drop in March

Sales of previously-owned homes fell in March but analysts say the housing market is showing signs of stabilization.

The National Association of Realtors said that so-called “existing home sales” fell last month to a seasonally adjusted annual rate of 4.57 million units, 3% lower than the downwardly revised rate of 4.71 million in February.

March sales were down 7.1% year over year, and came in weaker than the 4.65 million rate forecast by analysts surveyed by Briefing.com.

But despite last month's decline, economists say existing home sales appear to be stabilizing. Single family home sales, which are considered the core of the market, fell at a 10% annualized rate in the first quarter of 2009, after a 17.4% drop in the last three months of 2008.

GM plans extended shutdown

General Motors says it plans extended shutdowns at 13 of its 20 assembly plants in North America this summer to combat slumping auto sales. Corresponding down weeks are also scheduled at GM's stamping and powertrain facilities

GM typically closes its facilities for two weeks in July to change production lines for new models. Much like over the winter holidays, the automaker plans to extend that scheduled shutdown to help bring down the growing stockpile of unsold cars and trucks.

Under the plan, GM says approximately 190,000 vehicles will be removed from its North American production schedule in the second and early third quarter of this year.

Earnings parade continues on Wall Street

Delivery giant UPS - considered a barometer for the overall economy - says profits fell 56% in the first quarter and projected earnings below Wall Street’s expectations for the current quarter due to the weak economy.

UPS’ Chief Financial Officer said an economic recovery might begin late this year but more likely wouldn't start until next year.

And after Wednesday’s closing bell, Apple said that a surge in iPhone sales helped offset a decline in Mac computer sales as the company reported quarterly profit and revenue that thrashed Wall Street forecasts.

Apple reported a 15% jump in net income to $1.21 billion. Meanwhile, iPhone sales more than doubled, boosting the company's overall revenue, which rose nearly 9% to $8.2 billion.

President takes up credit card battle

Ramping up his campaign to crack down on credit cards, President Obama will meet today with executives of 14 leading companies to press his case for new consumer protections.

The White House meeting comes a day after credit card legislation opposed by the financial services industry moved forward on Capitol Hill. The House Financial Services Committee on Wednesday voted 48-19 to approve a bill to clamp down on rates and fees.

The House bill would, among other things, ban "arbitrary" interest rate increases, prohibit excessive fees and order more disclosure. It could go to the full House for a vote as soon as next week.

Dire straits for state budgets

Even as they await billions in federal stimulus funds, states are racing to close a combined $95 billion budget hole in the coming weeks.

Hammered by plummeting tax revenues caused by the worst recession in decades, state lawmakers have already slashed spending and raised fees to close a combined shortfall that exceeded $100 billion this fiscal year, the National Conference of State Legislatures reported.

But states must still eliminate a $27.6 billion hole before their fiscal year ends, which for the vast majority of them is June 30. State law requires they maintain balanced budgets.

On top of that, they must slash $67.5 billion from their fiscal year 2010 budgets before July 1.

To do this, states have made widespread cuts in funding for education, social services, health care and public safety. The measures have resulted in teachers and police officers losing their jobs, the poor and elderly losing their benefits and public colleges losing their state aid.

Bailout cop calls for more disclosure

Neil Barofsky, the official overseeing the Troubled Asset Relief Program, says the Treasury Department must make public more information about how banks and other companies are spending money received under the $700 billion bailout.

Barofsky, who testified before the Joint Economic Committee today about a 250-page report he issued earlier this week detailing his concerns about the government's management of the TARP, says his top concern is that the Treasury continues to ignore his suggestion that bailout recipients state exactly how they're using their money.

soundoff (16 Responses)
  1. Annie Kate

    More unemployment – thats the number I want to see go down and that people are getting jobs again. Have we permitted corporations who wish only to get richer offshore so many of the jobs that there simply isn't going to be a way to employ everyone here in a job that pays well? If so, we laid out our own path to economic misery.

    April 23, 2009 at 9:53 pm |
  2. Anne

    I really hope that there will be more light to this as it is a growing concern as repulsive as the incredible interest being charged by the credit card companies. Banks are now charging a fee on accounts that do not have a direct deposit plan in place. In my case, I have had an account with Sovereign bank for the past 16years and recently found out I am being charged $5.00 a month for not having funds "deposited directly" on the account. Like so many other Americans, I am now unemployed, where is that money supposed to come from? And even if I were working as a freelance or able to obtain funds from somewhere else, I would still be charged because it is not a direct deposit? What is the logic behind that? Isn't this a perfect scheme for the bank to stiff the consumers? Isn't this a perfect example of unfair business practices?

    April 23, 2009 at 8:58 pm |
  3. Ray

    The UAW is a parasite on auto companies! Today comforms that! While millions of us are drawing crumbs on unemployment UNION WORKERS get a full paid nine week vacation! Oh,I forgot that they are "contractually obligated " to take the money! What happened to the "MORALE OBLIGATION"!

    April 23, 2009 at 7:18 pm |
  4. Als

    Pres Obama is still on probation period even after 100 days. He is still new to the job. Pres Obama needs the same time Bush had 8 years. It is to early to grade him. What grade did you give Bush at this time? .

    April 23, 2009 at 7:05 pm |
  5. debinaz

    what a concept for these companies to state what they are using the tarp money ...this tarp and stimulus has not worked and we need to stop lending money.....the chinese wont lend money to us and now we are just printing money......i would suggest to vote against all of these politicains that voted for the tarp money and that budget as well....they all need to be fired...

    April 23, 2009 at 6:05 pm |
  6. earle,florida

    Mr. Barofsky is correct in questioning the treasuries slow response in how the "TARP" money is beig divided up without transparency. What is obvious is,"if" B of A (Bank of America) didn't purchase Merrill Lynch,the investment brokerage house would have gone by way of bankruptcy as Lehman Brothers had,which for the government at the time the any public knowledge would be hard to swollow! Was it prudent? Remember,Countrywide was a huge drag on BofA's balance sheets with the CDO's,and CDS's in the multi-billions waiting to implode,so the deal with the devil's was inked! It should be no suprise to the public now that it was the best logical path to follow. Bank of America,and Merrill Lynch with or without Ken Lewis will do just fine in the coming years. PS Citigroup is going to get the full wrath of the Treasury,along with AIG ,just a personal vendetta for a pair of companies that almost cratored the American Capitalist System!

    April 23, 2009 at 5:28 pm |
  7. Larry

    The President might want to talk to the Veep about MBNA and his relationship with the credit card issuer.

    April 23, 2009 at 5:22 pm |
  8. Mari

    When Bush took office in January of 2001, he inherited a robust economy, a balanced budget, a budget surplus and a government who had been paying....... down..... the $5 trillion in national debt.

    Obama inherited a disaster! It will take time to turn the economy around.

    It took Bush eight years to deplete our nation!

    We have been through tough times before and we WILL get through this!


    April 23, 2009 at 4:50 pm |
  9. Lisa in CA

    And yet they still insist "top down" is the way to go.

    April 23, 2009 at 4:38 pm |
  10. Jim Carroll internet free press.com

    We need to create a Reserve- Retraining Work Force which would put an end to unemployment. Ten million people could be paid 50,000
    dollars per year while they go back to school for only 500 billion dolars, which is only back pocket change, when you consider what we gave to the banks. You can get complete details of a Reserve-Retraning Work Force at my web site.

    April 23, 2009 at 4:09 pm |
  11. Michael "C" Lorton, Virginia

    And I fear that things are going to get much worse!

    April 23, 2009 at 3:35 pm |
  12. Richard A. Spomer

    President Obama has the ansewers foractions in the criminal charges which can not be brought against Cheney and Rice just; because they agreed with the act, you have to charge those in the military that had participated in the acts of water-boarding are you really going to waste taxpayer dollars tracking down and prosecuting those solders which had participated in the activity or leave it up to the Military to try and convict there men? How will they hold up after being in Afghanistan War now going over 7 years, the bailing out of Mortgage Companies that are receiving from both ends, be the head of the Democratic organization that approving of Gay & Lesbian marriage and activities, Keeping Christianity out of the schools ware it is in fact needed more now days, and then the facts which show that unemployment numbers correlate and Illegal immigration are in sink with one another.

    April 23, 2009 at 3:31 pm |
  13. Mike Syracuse, NY

    So what exactly are the signs Obama sees that things are getting better?

    April 23, 2009 at 3:09 pm |
  14. Sandra

    How can that be?? Obama has spent billions of dollars. Too bad he doesn't have a clue what he is doing. Spending billions of dollars won't fix the economy. Private sector jobs are what is needed, not throwing money around on more pork programs. Obamas policies need to change to encourage businesses to come back to the US and the ones still here to grow. Unions will only kill that possibility. Obama has never run a business and has no understanding of how they operate. I hope he learns before it's too late.

    April 23, 2009 at 2:51 pm |
  15. Larry

    The President might want to talk to Joe Biden about MBNA and his relationship with the credit card issuer.

    April 23, 2009 at 2:28 pm |
  16. ,Barbara-Dalton Ga

    I a live in a small NGA town that has only 1 major industry which is
    the manufacture of carpet and other floor coverings. Needless to
    say we have a really high unemployment rate at the present time and
    will probably never recover competely from this recession.
    Now I am sad to say our chicken processing plant is closing. This will
    affect around 300 people. I think the fact that a chicken processing plant closing really indicates how serious things are getting.

    April 23, 2009 at 2:25 pm |