Economy

Providing unemployment benefits to the long-term jobless has preserved nearly 2 million jobs and injected billions to help the nation's economy expand. 

About 1.7 million jobs have been saved or created since the recession began in late 2007 that "would not have been there absent this spending," a new report released Thursday from the Economic Policy Institute found. 

"Unemployment benefits give unemployed workers needed financial support to cope after the loss of a job, and they are also one of the most effective mechanisms for injecting spending into the economy", the report said. 

The Senate is poised to pass an extension of unemployment benefits, which lapsed June 2, early next week. Since early last month, nearly 2.5 million long-term jobless Americans have lost benefits beyond the 26 weeks offered by states.

New claims for unemployment benefits dropped sharply last week, hitting their lowest level since September 2008 as factories stayed open during the summer months. 

Claims dipped 29,000 to 429,000 from the previous week’s revised figure of 458,000 for the week ending July 10, according to Labor Department figures released Thursday. 

General Motors and other manufacturers haven’t temporarily laid off workers this summer. GM has decided not to take their usual two-week break during the summer to retool their factories. 

Separately, wholesale prices fell for a third straight month in June, pushed down by falling energy and food costs, the largest decline in eight years. 

The Federal Reserve was slightly less upbeat on the economy and employment last month, holding stocks in check Wednesday. 

The central bank said in June it expects the economy to grow between 3 percent and 3.5 percent this year, down from its April estimate of 3.2 percent to 3.7 percent, according to minutes released Wednesday from the Federal Open Market Committee's June 22-23 meeting.

As evidence of the nation's economic recovery, the Fed reported an increase in consumer spending, increased business spending on equipment and software as well as increased production.

The expansion could be restrained by firms "caution in hiring and spending in light of the considerable uncertainty regarding the economic outlook," according to the minutes.

U.S. Chamber of Commerce President Tom Donohue said he didn't believe the Obama administration is "anti-business," even as he went after White House policies.

A temporary replacement for Sen. Robert Byrd (D-W.Va.) is expected to be named by 5 p.m. on Friday, providing Senate Democrats with the 60th vote they need to pass an unemployment benefits extension. 

West Virginia Gov. Joe Manchin said Tuesday afternoon he expects to name a replacement for Byrd, who died in late June, by Friday evening. 

As long as the vote count doesn't change between now and early next week, the bill is expected to pass after weeks of a Republican filibuster over adding to the deficit.

The Obama administration’s $2.1 billion program to help states with hard-hit housing markets is coming under new scrutiny. Read more...

The U.S. trade gap widened unexpectedly in May, hitting its highest level in 18 months as demand increased for imported cars and consumer goods. 

The trade deficit increased 4.8 percent to $42.3 billion up from $40.3 billion revised in April, the largest level since November 2008, the Commerce Department reported Tuesday. 

Demand for American goods and services increased by 2.4 percent to $152.3 billion while imports rose 2.9 percent to $194.5 billion in May, the highest level since October 2008, behind increases in cars, computers and industrial machinery.

The European debt crisis has raised concerns that demand will drop for American exports, just as the U.S. manufacturing sector kicks into high gear. 

West Virginia Gov. Joe Manchin (D) is expected to name a replacement for Sen. Robert Byrd (D-W.Va.) by Sunday, according to reports.

Replacing the longest-serving member of Congress could give Senate Majority Leader Harry Reid (D-Nev.) the 60th vote he needs to pass an extension of unemployment insurance. 

Manchin said the decision could come as early as Friday and no later than Sunday, as he organizes the special election process with the state legislature. 

The benchmark interest rate will probably remain near zero for the near future as the economy recovers.

Federal Reserve Bank of Richmond President Jeffrey Lacker told reporters Monday, “I’m comfortable with rates where they are now. My feeling on rates will depend on how the data comes in and what I hear from my colleagues.”

Lacker, who doesn’t have a vote this year on rate decisions, said, ”You have some surges, some slower periods. It’s just going to be a choppy recovery,” he said, according to news reports.

Federal Reserve officials have agreed to leave rates low and have said they would continue to do so “for an extended period of time” because tight credit is holding back consumer spending, which accounts for 70 percent of the economy. 

The central bank also isn’t likely to consider any future economic stimulus, he said. 

More than 2 million Americans have lost unemployment benefits and that number will continue to rise if the Senate can’t pass a bill.

Senate Majority Leader Harry Reid (D-Nev.) needs one more vote — most likely the interim replacement for Sen. Robert Byrd (D-W.Va.), who died June 28 — but that vote may not arrive on Capitol Hill until late this week or early next. 

Reid will need to wait to push through the $34 billion bill until West Virginia Gov. Joe Manchin (D) names that person, aides reconfirmed Monday. 

If the Senate doesn't act by week's end, more than 2.5 million will lose their benefits beyond the standard 26 weeks offered by the states. 

Manchin had said he would appoint someone by Monday but has since pulled back from that statement. He has called a special legislative session for Thursday to set up the special election process for Byrd’s seat. 

Although Manchin’s plans are unknown, he could wait until after the special election rules are settled before naming someone to Byrd’s seat.