January 15, 2009

Who's been predicting a second-half recovery? Clearly, we're looking at least another year of economic pain:

Jan. 15 (Bloomberg) -- First-time claims for U.S. unemployment benefits last week rose more than forecast, signaling companies stepped up the pace of firings at the start of the year.

Initial jobless claims jumped by 54,000 to 524,000 in the week that ended Jan. 10, from a revised 470,000 the prior week, the Labor Department said today in Washington. The total number of people collecting benefits decreased from a 26-year high.

The worst holiday sales season in at least four decades and the lack of credit will probably prompt even more payroll reductions in coming weeks and months. President-elect Barack Obama, who takes office next week, has proposed a stimulus plan aimed at saving or creating up to 4 million jobs.

“We’ve had consistent numbers that are worse than expectations,” Dan North, chief U.S. economist at Euler Hermes ACI in Owings Mills, Maryland, said in an interview with Bloomberg Television. “That kind of tells you that the recession seems to be accelerating just a little bit and puts the forecast of a second-half recovery at risk.”

Another Labor report showed wholesale prices fell 1.9 percent in December and were down 0.9 percent for all of 2008. Last year’s drop was the largest since 2001.

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