Economic Data Suggests ‘Recovery’ is Fizzling

July 2, 2010

WASHINGTON

By CHRISTOPHER S. RUGABER

Fears that the economic recovery is fizzling grew Thursday after the government and private sector issued weak reports on a number of fronts.

Unemployment claims are up, home sales are plunging without government incentives and manufacturing growth is slowing.

Meanwhile, 1.3 million people are without federal jobless benefits now that Congress adjourned for a weeklong Independence Day recess without passing an extension. That number could grow to 3.3 million by the end of the month if lawmakers can’t resolve the issue when they return.

All of this worries economists. As jobless claims grow and benefits shrink, Americans have less money to spend and the economy can’t grow fast enough to create new jobs. Some are revising their forecasts for growth in the third quarter. Others are afraid the country is on the verge of falling back into a recession.

“We find the level and direction in jobless claims somewhat troubling and the increase is likely to feed double-dip fears,” said John Ryding, an economist at RDQ Economics in a note to clients.

New claims for benefits jumped by 13,000 to a seasonally adjusted 472,000, the Labor Department said Thursday. The four-week average, which smooths fluctuations, rose to 466,500, its highest level since March.

Claims have remained stuck above 450,000 since the beginning of the year. Requests for unemployment benefits dropped steadily last year after reaching a peak of 651,000 in March 2009. Economists say they will feel more confident about sustained job growth when initial claims fall below 425,000

Adding to that is the growing number of people who stand to lose government support while they search for work.

For the third time in as many weeks, Senate Republicans blocked a bill Wednesday night that would have continued unemployment checks to people who have been laid off for long stretches. The House is slated to vote on a similar measure Thursday, though the Senate’s action renders the vote a futile gesture as Congress prepares to depart Washington for its holiday recess.

During the recession, Congress added up to 73 weeks of extra benefits on top of the 26 weeks typically provided by states. Democrats in the House and Senate want them extended through November. Republicans want the $34 billion cost of the bill to be paid for with money remaining from last year’s stimulus package. Democrats argue that it is emergency spending and should be added to the deficit.

Some economists say they may revise their forecasts for growth in the third quarter if the benefits are not extended.

“People whose benefits are going to run out will simply not have the spending power necessary to help drive growth,” said Dan Greenhaus, chief economic strategist at Miller Tabak.

The housing market is also weighing on the economy. The number of buyers who signed contracts to purchase homes tumbled 30 percent in May, the National Association of Realtors said. And construction spending declined 0.2 percent in May as residential building fell, the Commerce Department said.

Both were affected by the expiration of government incentives to buy homes. Buyers had until April 30 to sign sales contracts and qualify for tax credits.

The tax credit’s impact also showed up in the jobless claims report. Greater layoffs by construction firms fueled the increase, a Labor Department analyst said.

Separately, the Institute for Supply Management, an industry trade group, said its manufacturing index slipped in June. But it is still at a level that suggests growth in the industrial sector, which has helped drive the economic recovery.

Surveys released Thursday in China showed a slowdown in factories’ growth as exports faltered and analysts worry that cutbacks in government lending will cool the economy’s rapid rise. Reports from Markit Economics also indicated that manufacturing sector growth in India, South Korea, Australia and Taiwan was slowing.

The industrial sector’s growth also cooled slightly in the 16 countries using the euro and the United Kingdom.

The troubling information on the economy comes a day before the Labor Department is scheduled to release the June jobs report. That is expected to show a modest rebound in private-sector hiring. Overall, employers are expected to cut a net total of 110,000 positions, but that includes the loss of about 240,000 temporary census jobs. Private employers are projected to add 112,000 jobs, according to a survey of economists by Thomson Reuters.

That would be an improvement from May, when businesses added only 41,000 workers. But the economy needs to generate at least 100,000 net new jobs per month to keep up with population growth, and probably twice that number to bring down the jobless rate.

The unemployment rate is expected to edge up to 9.8 percent from 9.7 percent in May.

Layoffs are rising in the public sector, as states and local governments struggle to close persistent budget gaps. New York City approved a budget Tuesday that cuts about $1 billion in spending and would eliminate 5,300 jobs from the city’s 300,000-person work force.

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UFO Sighting in Moscow

October 12, 2009

The Sun

By Vince Soodin

The astonishing ring was spotted over the city and captured on video by stunned locals.

It has been described as a “true mystery” by a UFO expert.

Scores of supernatural enthusiasts have been gripped by the astonishing footage and speculated it could be an ALIEN MOTHERSHIP.

The sighting in the clouds is reminiscent of scenes from the 1996 Hollywood blockbuster Independence Day.

Aliens tried destroy the earth massive using circular ships to zap the planet powerful mega lasers.

Nick Pope, a former UFO analyst for the Ministry of Defence, examined the remarkable footage.

He said: “I’ve never seen anything like this. It’s a true mystery.

“Whatever it is, it’s one of the most beautiful and spectacular things I’ve ever seen.

“Speculation is at fever pitch on the internet.”

“This is being discussed on forums, blogs and email lists all around the world. Some people say it’s a bizarre meteorological effect.

“Theories range from it being an alien mothership, proof of Russian weather modification technology – a weather weapon – or even a sign of the end of the world.

The video has appeared on YouTube and been viewed more than 100,000 times.

The bizarre light was spotted last Wednesday.

But meteorologists rejected theories of the supernatural calling it an optical effect.

The Moscow’s weather bureau said several weather fronts had passed through Moscow as the sun shined from the west to cause the effect.

A spokesman for the bureau said: “This is purely an optical effect, although it does look impressive.

“If you look closer, you can see sun rays coming through that cloud. Most likely, the sun was setting when the video was being made.”

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