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November 4th, 2009
04:42 PM ET

Financial Dispatch: Fed decides to stay the course

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/POLITICS/10/12/john.king.monday.memo/art.traders.gi.jpg caption="Federal Reserve policymakers voted again to keep the central bank's key interest rate near zero, just one week after the government reported that the economy grew in the third quarter."]

Andrew Torgan
CNN Financial News Producer

Federal Reserve policymakers voted once again today to keep the central bank’s key interest rate near zero. Ben Bernanke and Co. added in a statement that although the economy continues to improve, the Fed intends to stay the course – at least for a while.

The central bank’s decision came just one week after the government reported that the economy grew in the third quarter, the first gain in more than a year

While it was widely assumed that the Fed would leave rates in a range of 0% to 0.25%, economists and investors were eager to see how it described the economy in its statement.

And the Fed repeated language from earlier statements that economic conditions are “likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

The federal funds rate is a benchmark used to set the rates paid on a wide range of business and consumer loans, such as home equity lines and credit cards. It has been near zero since December 2008.

Also in focus, the nation's employment picture continued to deteriorate last month, although the rate of decline continued to slow, according to two reports out today.

Payroll-processing firm ADP said private-sector employers cut 203,000 jobs in October. It was the seventh month in a row that the number of job cuts fell from the month before.

In a separate report, the pace of announced job cuts slowed, but the number of cuts announced in 2009 will soon exceed last year's total.

Job cut announcements by employers fell to 55,679 in October, 16% fewer than in September, according to outplacement firm Challenger, Gray & Christmas. It was the third consecutive monthly decline.

We’ll get the government’s official snapshot of the labor market on Friday with the October employment report. Consensus estimates are for a loss of 175,000 jobs and the unemployment rate ticking up to 9.9%.

Meanwhile, the number of Americans filing personal bankruptcies surged 9% in October, and we are now on target for the highest annual total in four years, according to a report issued today.

The American Bankruptcy Institute, an industry research firm that relies on data from the National Bankruptcy Research Center, said 135,914 consumers filed for bankruptcy last month. Almost a third of the bankruptcies were filed under Chapter 13, in which consumers are put on a repayment plan of up to five years.

The group is also forecasting total bankruptcies will exceed 1.4 million in 2009, which would be the highest since 2005. It would also be an increase of at least 30% from last year.

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Filed under: Andrew Torgan • Finance
soundoff (2 Responses)
  1. Annie Kate

    What happened to those new rules/laws about limiting those who could file for bankruptcy? If it did and bankruptcies are still up that is quite a sobering comment on our economy at the present.

    November 4, 2009 at 6:17 pm |
  2. Tim Gibson

    One question, when are we going to audit the Federal Reserve who had the biggest hand in our economic collapse?

    November 4, 2009 at 5:06 pm |

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