It’s been another rough week in the financial world:
GDP shank 6.2 percent in 4Q 2009. It’s the biggest drop in 25 years.
New claims for unemployment rose to 667,000, the most in 27 years. Continuing unemployment claims rose to 5.1 million (topping the 1967 record). A year ago, continuing unemployment claims were 2.8 million. On top of that, 1.4 million people are getting extra unemployment benefits, so we’re looking at 6.5 million unemployed people getting some kind of benefits. (The British call this “on the dole.”)
Mass layoffs doubled in January 2009 (where 50+ people are laid off at the same time). What will February losses look like this week? Maybe as many as 750,000 to 800,000 newly unemployed. The unemployment rate is expected to get to 8 percent. Let’s hope it doesn’t go beyond that.
The Conference Board reported its lowest reading: 25. That’s the lowest number in 4 decades. Consumer’s expectations of the economy? 27.5. That blows away the previous low reading of 45.2 set in December 1973.
And then there’s the stock market: It ended down 4.11 percent to 7,062.93. The S&P 500 ended the week down 4.54 percent to 735.09. All eyes are watching the S&P this week to see if it falls below 700. That’s a key support level.
And while we’re on the subject, if the Dow falls much below 7,000, it will be at the point where half of the rise from the low in 1932 to the high in October 2007 will have disappeared. We’ll have lost 75 years of upside in 6 months, points out this week’s Barron’s. Think it can’t go lower? The stock market fell 90 percent in the Great Depression.
So far the stock market is down 17.5 percent in 2009. $1.9 trillion has been lost.
New home sales are down 306,000 on an annualized basis. And, inventories rose to a 13-month level (the amount of time it would take to get rid of all the houses on the market at the current rate of sale). It’s still a tough housing market.
We’ll talk about all this and more on today’s Ilyce Glink show. Live on WSB Radio from 11a to 1p EST on Newstalk 750 WSB.
March 1, 2009.