Stimulus Package Goes to Senate as Signs of Economic Downturn Continue
The Labor Department on Thursday said that jobless claims jumped to a record high in January. The number of claims rose 159,000 to a higher-than-expected 4.78 million in the week ending Jan. 17 — the highest number since the Labor Department began keeping these records in 1967.
“These are weak numbers, showing the recession continues to drag and is even intensifying,” Andrew Bekoff, chief investment officer at LPB Capital LLC in Doylestown, Penn., told Reuters.
Also on Thursday, the Commerce Department said that durable goods orders dropped 2.6 percent in December, and revised their November estimates to show a 3.7 percent decline that month.
Meanwhile, Ford Motor Company — the only one of the big three U.S. automakers not yet receiving federal loans — announced that it lost $5.9 billion in the fourth quarter of 2008. That brings its total losses for 2008 to $14.6 billion.
“Ford and the entire auto industry faced an extraordinary slowdown in all major global markets in the fourth quarter that clearly had an impact on our results,” Ford CEO Alan Mulally said in a statement.
However, he said that the company still did not anticipate needing federal aid, unless the economy worsens significantly.
“We don’t plan to or foresee using it,” company spokesman Mark Truby told the New York Times.
Instead, Ford will lower production and costs to meet lower demand. The company will also tap $10.1 billion from its available credit lines in the first quarter of 2009.
Amid the grim economic news, the Senate prepared to debate President Barack Obama’s economic stimulus bill. The President has said that he wants to gain bipartisan support in the Senate for the bill — unlike the House, which passed it with no Republican votes.
With 41 seats in the Senate, Republicans have just enough votes to block the legislation with a filibuster.
Mr. Obama has called for cutting some controversial restrictions — including payments for contraceptives in Medicare — in response to Republican concerns.
“There may be a kind of meta-strategy here: That simply by lowering the volume of acrimony, the president will probably get enough Republican votes to get it through the Senate,” Ross Baker, a political scientist at Rutgers University, told the Christian Science Monitor.