Unemployment Rising; Dow Down Again While Bailout Hangs in Balance

The Labor Department says new applications for unemployment benefits rose to a seven-year high due to a weakening economy and the impact of Hurricanes Ike and Gustav.

By: The Associated Press and Staff Reports | News Channel 7
Published: October 02, 2008

WASHINGTON (AP) - The credit crunch is causing declines in manufacturing and the job market. More people than expected were in the unemployment lines last week.

At the same time, orders to U.S. factories fell by the largest amount in two years.

The Labor Department says new applications for unemployment benefits rose to a seven-year high due to a weakening economy and the impact of Hurricanes Ike and Gustav. Initial claims for jobless benefits increased by 1,000 to a seasonally adjusted 497,000. That's the highest since just after the September 11th terrorist attacks seven years ago.
The Commerce Department says August factory orders plunged by 4 percent compared to July.

Locally, Ben Davis with the South Carolina Employment Commission, talked to us about the current state of unemployment in Spartanburg area and how the current credit crunch will trickle down and make things worse.

He says:
- unemployment in Spartanburg Co. is currently 8.1%
- the number of jobs in Spa Co. has increased 2.6% since last year
- however, the number of people seeking jobs has increased 4.6% because of the economic crisis
- they attribute that to people who were homemakers, students, and retirees re-entering the workforce because of the current state of the economy; in other words, people realizing they have to go find a job to help the family pay for gas and groceries

So even though there are a few more jobs out there than there were this time last year, there are many more people competing for those jobs, leading to the rise in unemployment.

Watch wspa.com for more updates.

Stocks Down Thursday
NEW YORK (AP) - It was a bruising day for investors, amid
troubling economic news and the wait for a possible House vote on
the financial rescue package.
The Dow fell 348 points to 10,482.
The S&P dropped nearly 47 points to 1,114.
And the Nasdaq composite lost 92 points to 1,976.
Declining issues held a 5-1 lead over advancing stocks.
NYSE volume came to 6 billion shares. Nasdaq volume was 2.2
billion shares.
Oil was among commodities seeing price declines. Light, sweet
crude for November delivery fell $4.56 to settle at $93.97 a
barrel.

More stories:
House Readies For Second Attempt On Bailout Bill
WASHINGTON (AP) - House members are gearing up for their second chance to vote on a multibillion-dollar financial industry bailout.

The measure passed the Senate yesterday, after several changes were added. Those include tax breaks for the middle class and businesses, and raising the federal deposit insurance cap from $100,000 to $250,000.

The new provisions were an effort to win over dissenting House members and get the bill passed the second time around. As the Senate majority leader now describes it, the bill isn't "legislation for lower Manhattan. This is legislation for all America."

House leaders will be lobbying today for the dozen or so more supporters they think need. A showdown vote is expected tomorrow.

News Channel 7 spoke with 4th District Congressman Bob Inglis. It is likely that Inglis will vote “yes” for the Bailout Package, but his Communications Manager, Price Atkinson, says anything can change between now and the vote, and a “yes” vote is not absolute.

Colleen Mangone, Communications Director and Chief of Staff for Congressman Gresham Barrett, spoke to use Thursday afternoon.

“He (Barrett) has not decided on how he will vote yet,” said Mangone. “He is taking all of the information he receives about the bill into account. A lot can change between today and tomorrow’s vote. We have received a ton of calls from our constituents that are concerned on both sides of the aisle.”

Chuck Fant from Congressman John Spratt’s office says he will be voting yes.

News Channel 7 is waiting to hear back from other congressmen.

Find out how South Carolina senators voted.

Other stories:
Bush says 'people are watching' House vote
WASHINGTON (AP) - President Bush says "a lot of people are watching" the House as it considers financial rescue legislation and says lawmakers must listen to voices urging passage.

Speaking to reporters at the White House today, a day before the House vote, Bush warned that tight credit is freezing the ability of small businesses not only to expand, but to exist. He said the bill before the House is the "best chance" to correct the problem.

Bush said the issue is affecting employees and families across the country and that lawmakers "must listen" so confidence can be restored in markets and financial institutions. The House rejected a rescue package on Monday, shocking Wall Street and Washington.