Domestic Taxes

New claims for unemployment benefits dropped last week but with the monthly report looming on Friday it's hard to get excited about Thursday's drop. 

Claims dropped 6,000 down to 472,000 from last week's revised 478,000, the Labor Department reported Thursday. 

The four-week moving average, which smoothes out the volatility of the weekly number and provides a better gauge of the employment situation, also dropped by 2,500 to 485,500, down from last week's revised level of 488,000, which was the highest level since Nov. 28, 2009.

Although claims are well below their high of 651,000 in March 2009, they still aren't low enough to signal strong improvement in the job market. Claims were gradually declining but have been increasing in recent months. 

Congress' inability to make a decision about the fate of Bush-era tax cuts is contributing to the unemployment crisis facing the country, according to the Labor Day 2010 report by the National Association of Manufacturers (NAM).

Mortgage applications increased 2.7 percent last week as loan rates dropped to record lows. 

The refinance index increased 2.8 percent for the week that ended Aug. 27, up from 1.8 the previous week and the highest level since May 1, 2009, as homeowners opted to stay put as the housing market struggles, the Mortgage Bankers Association reported Wednesday. 

"Refinancing activity picked up again last week, reaching new 15-month highs, as borrowers took advantage of even lower mortgage rates," said Michael Fratantoni, MBA's vice president of research and economics, in a statement. 

The Commerce Department decided Tuesday not to investigate allegations by U.S. manufacturers that China subsidizes its exports by undervaluing its currency, prompting calls for Congress to act. 

"The bottom line is that China continues to manipulate its currency at the expense of American workers and manufacturers," Senate Finance Chairman Max Baucus (D-Mont.) said in a statement. "We must do everything we can to stop this manipulation, and ensure a level playing field for America’s ranchers, farmers, manufacturers and workers."

U.S. industry groups argued in two cases that the department should impose countervailing duties because of China's policies that keep their currency undervalued in relation to the dollar. 

Commerce Department officials said the petitioners failed to make their case.

Jason Furman, the deputy director of President Obama's National Economic Council, on Tuesday warned that a one-year extension of Bush-era tax cuts benefiting the wealthy could be the first step in making them permanent. 

Senate Republicans were quick to strike back after President Obama urged passage of a long-stalled small business bill and possible plans to let tax cuts expire for those who make more than $250,000 a year, on Monday afternoon. 

"Instead of growing jobs as promised, Washington Democrats have grown the size of the national debt, the federal government and the unemployment rate," Senate Minority Leader Mitch McConnell said today in a statement. 

"And now the administration is calling for a massive tax hike on small businesses in the middle of a recession. So it’s no surprise that most Americans think the country is on the wrong track and that Democrat policies have failed to do anything to fix their top concern, the economy," he said. 

"It’s time to listen to the American people, lower the deficit by reducing out-of-control spending, prevent tax hikes and work with Republicans to create the environment necessary to grow sustainable, private sector jobs."

Austan Goolsbee, a member of President Obama's Council of Economic Advisers, on Monday predicted a bumpy road for advocates pushing the extension of all Bush-era tax cuts because, he said, those benefiting the wealthy would do little to stimulate the economy. 

There’s growing momentum within the party to extend cuts on those with higher incomes, too, given the stubborn recession.

President Obama's Economic Recovery Advisory Board on Friday unanimously approved a set of tax reform suggestions that will be delivered to the president for his review. 

The suggestions were merely just that — suggestions. The 126-page report did not make recommendations on what the White House should do about reforming the tax code.  

House Majority Leader Steny Hoyer (D-Md.) on Thursday sought to set the record straight on which businesses would be hit with a tax hike under the Democrats' plan to end Bush-era tax cuts benefiting individuals earning more than $200,000 and couples making more than $250,000.