The number of newly laid-off workers signing up for unemployment assistance has hit a 26-year high in the United States, as several reports show the U.S. economy struggling with the recession.
Wednesday's data from the Labor Department say jobless claims surged by 30,000 as 586,000 people requested unemployment compensation last week.
Personal spending drops
Another report showed personal spending by U.S. consumers dropped for the fifth straight month - the worst showing in half a century.
And a separate report said orders to U.S. factories fell one percent in November, which was less than the decline reported in the prior month.
Not all the economic news is gloomy, as one effort to bolster the world's largest economy is showing promise. The number of applications for mortgages surged by 48 percent last week as the interest rates on mortgages fell to their lowest level in five years, 5.04 percent. Interest rates dropped after the U.S. central bank loaned more money to two huge government-sponsored mortgage companies.
Oil prices fall
And the declining price of crude oil is also allowing consumers to spend money on other goods and services. The price of oil for future delivery fell to less than $37 a barrel in New York trading.
European Central Bank chief Jean-Claude Trichet told an economic conference Tuesday that he thinks the markets are slowly regaining some confidence because of efforts to bolster the economy by central banks around the world.
But U.S. retailers are not nearly as confident. The National Federation of Retailers is urging President-elect Barack Obama to help boost spending by waiving sales taxes for three 10-day periods in 2009. Retailers have been slashing prices to attract consumers, but Standard & Poor's economist David Wyss warns many stores will not break even.
Emerging economies are also taking a hit. The Indian auto industry is responding to a drop in sales by cutting shifts at its auto factories, and some foreign automakers are scaling down plans for expansion.
Some information for this report was provided by AFP, AP and Reuters.
