Unemployment Filings Reach 26-Year High

The number of people filing for unemployment benefits hit a 26-year high last week, as the deepening recession forced more employers to cut jobs.

First-time claims for unemployment rose 5.4 percent, to 586,000 for the week ending Dec. 20, the Labor Department reported this morning. The last time claims were that high was Nov. 27, 1982. The four-week moving average, which is a less volatile indicator, rose to 558,000 from 544,250, also a 26-year high.

Orders for durable goods, such as appliances and televisions, dropped 1 percent to $186.9 billion, the U.S. Census Bureau said today. It was the fourth consecutive monthly drop but a much smaller decline than the 8.4 percent drop in October, thanks largely to orders for defense-related goods. Excluding those, which can vary widely quarter to quarter, new orders decreased by 0.9 percent.

Prices fell 1.1 percent last month, compared with 0.5 percent, the Commerce Department reported today. Much of that was due to falling gasoline and food prices. When food and energy are excluded, prices were actually flat.

Consumer spending continued to decline in November, falling 0.6 percent, even as consumers benefited from falling gasoline prices and retailers attempted to lure them into stores with deep discounts in an effort to salvage the holiday shopping season.

Retailers might have succeeded to an extent. November's drop was smaller than the 1 percent drop in spending in October. But just as they did in October, consumers also kept a chunk of their savings at the pump in their pockets. Personal savings as a percentage of disposable income was 2.8 percent in November, compared with 2.4 in October.