Four economic reports released in the United States Wednesday illustrated the strain the U.S. economy is under, with jobless claims high, consumer spending low, orders to U.S. factories down and homes sales at the lowest level in nearly 18 years. The U.S. Labor Department reported that initial requests for unemployment benefits fell to a seasonally adjusted 529,000 from the previous week's upwardly revised figure of 543,000. But the figure remains at recessionary levels, and the four-week average stands at 518,000 – the highest level since January 1983. The figures did show one improvement, with the number of people continuing to claim unemployment insurance falling unexpectedly to 3.96 million, from the previous week's 4.02 million, which was the highest level in 25 years. The labor market has grown by about half since 1983. Meanwhile, the U.S. Commerce Department reported that consumer spending fell by 1 percent in October, worse than the 0.9 percent fall that was forecast. Orders to U.S. factories for big-ticket manufactured goods also plunged last month by the largest amount in two years. Orders for durable goods dropped by 6.2 percent, more than double the predicted figure. The report showed declines throughout the manufacturing sector, led by decreases in autos and airplanes. The Commerce Department also had gloomy news on new home sales, which decreased 5.3 percent last month to a seasonally adjusted annual sales pace of 433,000 homes, the lowest level since January 1991. The median price of a new home sold in October fell to $218,000, down 7 percent from a year ago, and the lowest since September 2004, the Associated Press reported. The U.S. government reported Tuesday that the overall economy, as measured by the gross domestic product, shrank at an annual rate of 0.5 percent in the July-September quarter, reflecting the free-fall decline in consumer spending.
