Washington Extra – Stormy weather on economic front

August 12, 2010

A new round of extremely violent thunderstorms rolled through Washington this morning and brought with it more stormy economic news. The latest hiccup to what President Barack Obama had hoped would be a “recovery summer” was the news that filings for unemployment benefits rose by 2,000 to a seasonally adjusted 484,000 in the week ended Aug. 7.

USA/WEATHERExperts had expected a drop in claims and the unwelcome surprise indicated that hiring is still weak and employers may return to cutting staff.

The grim data came two days after the Fed warned that the pace of the recovery had slowed and the trade deficit widened, sending economists back to their drawing boards to revise growth forecasts. China’s economy also showed signs of going off the boil.

On the political front, the outlook wasn’t much brighter. An NBC News/Wall Street Journal poll showed pessimism on the rise  — almost two thirds of Americans believe the economy will get worse before it gets better — a bad omen for Obama and Democrats with congressional elections less than three months away.

But we found some voters outside the Beltway to be less-than-thrilled with the Republican alternatives.

“We’re stuck between a party of bad ideas and one of no ideas,” said Dayton, Ohio retiree Jeni Wilson. “I wouldn’t say we’re spoiled for choice.”

Here are our top stories from today:

Jobless claims jump shows labor market ailing

The number of workers filing new claims for unemployment insurance unexpectedly rose last week to its highest level in close to six months, a fresh signal of a weak jobs market. The number of new claims for jobless benefits rose 2,000 to 484,000 in the week ended August 7, the second straight increase, the Labor Department said. Economists had expected claims to edge down to 469,000.

For more of this story by Corbett B. Daly’s story, click here.

Congressional election fails to stir voters

Democratic control of Congress and the fate of President Barack Obama’s agenda are on the line in U.S. congressional elections this November, but some voters do not seem thrilled with their choices. Discontent with Obama and his fellow Democrats in Congress as the economy struggles and the deficit soars has energized some conservatives, including the Tea Party movement, and boosted Republican chances of winning the House of Representatives and perhaps even the Senate.

For more of this story by Nick Carey and James B. Kelleher story, click here.

Analysis: Democrats and Republicans struggle with base

An unpredictable election year is threatening to become even more topsy-turvy as both Democrats and Republicans face uprisings from their liberal and conservative bases of support. Examples abound: President Barack Obama, on track to end the U.S. combat role in Iraq by the end of August, is scorched by some liberal commentators for still having troops there at all.

To read the rest of Steve Holland’s story, click here.

Extreme weather plagues farming, talks flounder

Global wheat markets reeling from Russian droughts, thousands of cattle killed by heat in Kansas, and countless crop acres wiped out by floods in Pakistan are glimpses of what can be expected as the world struggles to battle climate change. But as concerns mount over extreme weather hitting global food systems this year, governments are no closer to forging a pact to fight climate change.

To read the rest of Timothy Gardner’s analysis, click here.

Congress approves border security bill

Congress passed legislation to strengthen security along the border with Mexico, trying to tackle the politically sensitive issue of illegal immigrants ahead of November congressional elections. The Senate passed the bill on a voice vote, two days after the House of Representatives interrupted a six-week recess to approve it and another measure providing aid for struggling states.

For more of this story by Susan Cornwell, click here.

Special Report: Shorting Wall Street on the campaign trail

As Lehman Brothers spiraled to its doom in the summer of 2008, John Kasich could not help but worry. After all, Kasich, a former Ohio Congressman turned investment banker, had a chunk of his personal wealth invested in the free-falling firm. “I would make a few calls to friends of mine, like one guy in Chicago, and we would just sit there and say, ‘Is the stock going to go any lower?'” Kasich, 58, said during an interview at his gubernatorial campaign headquarters in Columbus, Ohio, the city where he ran a two-man investment banking office until after Lehman’s bankruptcy on September 15, 2008. “I didn’t really fixate on it. You just kept doing your job and you saw crazy things happening.”

For this full story by Steve Eder, click here.

USDA cuts world wheat view, but says no repeat of ’08

World wheat supplies will be tighter than expected as a devastating drought in Russia and its neighbors erodes healthy stockpiles, but the U.S. Agriculture Department said on Thursday there was no reason for rising prices to stage a repeat of 2008’s historic surge. In its August report, the Agriculture Department cut its world wheat production forecast by 2.3 percent to 645.73 million tonnes, its first estimate since Russia, normally the world’s No 3 wheat exporter, banned shipments to conserve domestic stocks.

 For more of this story by Charles Abbott and Roberta Rampton, click here. 

 Mortgage rates hit fresh lows on soft U.S. economy

Home loan rates set new lows in the latest week on more evidence of a soft U.S. economy and high unemployment, home funding company Freddie Mac. The average 30-year mortgage rate fell to 4.44 percent in the week ended Aug. 12, the lowest since Freddie Mac records began in 1971. The prior record low was 4.49 percent a week ago, which was well below 5.29 percent a year ago.

For more of this story by Lynn Adler, click here. 

What we are blogging…

One more secret at CIA – next week’s Top Chef winner and loser

The Central Intelligence Agency has one more secret to keep this week — who won the Top Chef challenge in next week’s episode. The TV cooking competition, in which House Speaker Nancy Pelosi was a guest judge and declared herself a “foodie,” previewed the coming week when the competing chefs do their thing at the intelligence agency. A smiling CIA Director Leon Panetta was shown in the snippet tasting an entry at a white-tablecloth table.

To read Toby Zakaria’s full blog, click here.

Photo credit: Reuters/Hyungwon Kang (pedestrian braves severe thunderstorm in Washington in June)


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