January 22, 2009

Historic Highs and Lows for America's Economy

U.S. jobless claims match record high

POLITICS - The number of new claims for jobless benefits in the United States jumped more than expected last week, as companies continue to cut jobs at a furious pace.

The Labor Department reported Thursday that initial jobless benefit claims rose to a seasonally adjusted 589,000 in the week ending Jan. 17, from an upwardly revised figure of 527,000 the previous week. The latest tally was well above Wall Street economists' expectations of 540,000 new claims.

The total matches a 26-year high reached four weeks ago. The last time claims were higher was in November 1982, when the economy was emerging from a steep recession, though the work force has grown by about half since then.

The increase is partly due to a backlog of claims that piled up in recent weeks in several states that experienced computer crashes due to a crush of applications, a Labor Department analyst said.

The four-week average of claims, which smooths out fluctuations, was 519,250, the same as the previous week.

The number of people continuing to seek benefits rose by 97,000 to 4.6 million, above analysts' expectations of 4.55 million. That's also up substantially from a year ago, when 2.7 million people were continuing to receive unemployment checks.

U.S. housing starts hit all-time low

New-home construction plunged to an all-time low in December, capping the worst year for builders on records dating back to 1959.

The Commerce Department reported Thursday that construction of new homes and apartments fell 15.5 percent to an annual rate of 550,000 units last month. That shattered the previous low set in November.

It was a much weaker showing than the pace of 610,000 that economists were forecasting and ended 2008 on a dismal note.

For all of last year, the number of housing units that builders broke ground on totaled just over 904,000, also a record low. That marked a huge 33.3 percent drop from the 1.355 million housing units started in 2007. The previous low was set in 1991.

The report also showed that applications for building permits – considered a reliable sign of future activity – sank to a rate of 549,000 in December, a 10.7 percent drop from the previous month.

Microsoft cuts 5,000 jobs

TECHNOLOGY - Microsoft Corp. is cutting up to 5,000 jobs after reporting an 11 per cent profit decline in its latest quarter.

The world's biggest software company said Thursday it earned US$4.17 billion or 47 cents per share in its second quarter ended Dec. 31.

Revenue was up two per cent from a year earlier at $16.63 billion, but operating profit fell eight per cent to $5.94 billion.

The company said it is cutting "headcount-related expenses, vendors and contingent staff, facilities, capital expenditures and marketing."

The plan includes the elimination of as many as 5,000 jobs in research and development, marketing, sales, finance, legal, human resources and information technology functions.

The cuts will be made over the next 18 months – including 1,400 immediately – and are expected to reduce costs by $1.5 billion annually.

The latest quarter's client revenue declined eight per cent from a year earlier "as a result of PC market weakness and a continued shift to lower-priced netbooks," the company stated.

However, server and tools revenue grew 15 per cent and sales in the entertainment and devices segment advanced three per cent ``driven by strong holiday demand for Xbox 360 consoles with a record six million units sold in the quarter."

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