Economic news: November 2009

Monday, November 30, 2009

Obama ups pressure on banks to help homeowners

NEW YORK (CNNMoney.com) -- Looking to jumpstart its foreclosure rescue plan, the Obama administration announced new steps Monday to pressure banks to help homeowners long term.

Responding to complaints that too many borrowers are stuck in trial adjustments, administration officials said they would more closely monitor loan servicers' handling of modification applications.

In cases in which they have all the needed documentation, top loan servicers will be required to report the status of each modification and their plan to reach a decision. Also, these servicers must say how they will communicate decisions to borrowers.

Those failing to meet their obligations could face penalties and sanctions.

To help borrowers through the process, the administration is providing more information on the documents they need to submit to be considered for a permanent modification. Federal, state and local officials will increase outreach to delinquent homeowners.

"We now must refocus our efforts on the conversion phase to ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones," said Phyllis Caldwell, the new head of Treasury's Homeownership Preservation Office.

The administration's move is its latest attempt to revitalize its $75 billion loan modification plan, which many fear will fall far short of its goal to help up to 4 million delinquent homeowners.

Stuck in trial modifications

A growing number of borrowers are complaining that they are not receiving long-term assistance. Some 650,000 homeowners are currently in this preliminary phase, but only a small fraction have received permanent assistance.

About 375,000 people should be eligible to receive long-term relief by year's end, said Treasury officials. The administration is set to release its first report on the conversions next week.

As of Sept. 1, only 1,711, or 1.26%, of all trial adjustments were made permanent after three months, reported the Congressional Oversight Panel, which monitors the government's use of bailout funds.

The administration's steps indicate its foreclosure rescue plan is in trouble, said Alan White, a law professor at Valparaiso University who studies loan modifications. He would hope to see 50,000 to 100,000 people receiving permanent modifications by now, but is concerned the figure will be much lower.

"If we don't see a big increase in the permanent modification numbers, then there's something seriously wrong with this program," said White, referring to next week's report. "I can only assume the number is appallingly low."

Gathering paperwork

Increasing oversight of the servicers' modification efforts should help, White said.

Under the president's plan, delinquent borrowers are put into trial modifications for several months to make sure they can handle the new payments and to give them time to submit their financial paperwork.

Borrowers that qualify for long-term modifications can keep making the lower payments for five years. At that point, the interest rate will be set at the rate at the time of the adjustment, currently about 5%.

Loan servicers, however, say they are having trouble getting the necessary documents from borrowers, while homeowners maintain that their financial institutions are repeatedly losing the paperwork.

And once homeowners send in their forms, servicers may find these borrowers don't have enough income or have too much equity or savings to qualify. It also may be more profitable for the bank to foreclose on the home than to modify the mortgage.

Once the modification becomes permanent, servicers, investors and homeowners are eligible to receive thousands of dollars in incentive payments.

Foreclosures: ‘Tide may be turning’Mortgage aid requests soar

Cyber Monday shoppers: 4 million per minute

NEW YORK (CNNMoney.com) -- Not satisfied with your holiday weekend shopping? Don't worry, it's Cyber Monday.

It is the day that e-tailers will furiously push big discounts, free gift cards, free shipping and any other gimmick they can think of to entice consumers to spend even more of their holiday shopping dollars online.

Shoppers seemed to be responding to these moves early Monday.

By 2:20 p.m. ET, more than 270 retailing Web sites tracked by Internet monitoring firm Akamai were drawing more than 4.3 million visitors per minute in North America.

Akamai said that its Net Usage Index -- which monitors North American visitors to sites such as American Eagle Outfitters, Overstock.com, QVC.com and eBags.com -- said traffic was up nearly 39% compared to the same time last year.

"We expect an even bigger spike in traffic later today," said Pedro Santos, chief strategist for e-commerce with Akamai. What's more, Santos said he expects heavy online traffic to continue on subsequent Mondays leading up to the last shipping day before Christmas.

Here's a sampling of what sellers were serving up to customers.

Walmart.com is offering nearly 150 specials on such items as flat panel TVs, gaming systems and toys as well as 97-cent shipping on laptops, digital cameras and MP3 players.

Wal-Mart (WMT, Fortune 500) said in a statement the deals are being offered through Friday, but only while supplies last.

LLBean.com is offering a $10 gift card with every $25 purchase or more. Macys.com is hoping that its offer of free shipping with every $75 purchase will draw big traffic to its Web site on Cyber Monday.

For book lovers, Barnesandnoble.com is chopping prices by 50% on all New York Times bestsellers and offering a $10 gift certificate for every $100 purchase.

Still, don't expect any special deal on Barnes & Noble's "Nook" eBook reader, which industry experts peg as one of the hottest products this holiday season.

A quick check on the book seller's Web site showed that if you order the Nook Monday, it won't be shipped until Jan. 4. And the "extra" incentive to Nook buyers is free shipping and a free gift certificate.

About 96.5 million Americans plan to shop online Monday, up from 85 million in 2008, according to the National Retail Federation.

The group said 88.2 million consumers will shop from home Monday but plenty of consumers -- an estimated 13.5 million -- will also look to lock in deals during their workday.

Despite these expected traffic numbers and heavy discounts, Cyber Monday is still seen as more of a ceremonial start to online holiday shopping.

The busiest online shopping day tends to be later in December, and is the last day that gifts can be shipped to guarantee delivery by Christmas Day.

Online retailers likely to see gain Cyber Monday: Hope for disappointed stores

Bernanke: Don't tamper with the Fed

NEW YORK (CNNMoney.com) -- Federal Reserve Chairman Ben Bernanke, just days ahead of his confirmation hearing, is warning Congress that actions limiting the central bank's independence could prove detrimental to the causes of financial reform and economic recovery.

In an op-ed piece to be published in Sunday's Washington Post , Bernanke criticizes two moves aimed at limiting the Fed -- a proposal in the Senate to strip the central bank of its bank regulatory powers and a House Financial Services Committee vote to audit monetary policy deliberations and actions.

"These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States," Bernanke wrote.

Bernanke says the congressional moves are a byproduct of the public frustration over the financial crisis and the government's response, especially the bailout of large banks. (Fed rage boils on Capitol Hill)

"The government's actions to avoid financial collapse last fall -- as distasteful and unfair as some undoubtedly were -- were unfortunately necessary to prevent a global economic catastrophe that could have rivaled the Great Depression in length and severity, with profound consequences for our economy and society," he wrote.

But the Fed chairman says that, while reforms are needed, "we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation."

0:00/03:18Buffett: Bernanke deserves an A

Among the ideas he supports is development of a special bankruptcy procedure for firms "whose disorderly failure would threaten the integrity of the financial system -- to ensure that ad hoc interventions of the type we were forced to use last fall never happen again."

Bernanke's column comes ahead of a Senate Banking Committee hearing, scheduled for Thursday, considering his nomination for a second term as Fed chairman. President Obama announced the nomination in August.

The last sentence of his commentary is likely to be the theme he and his supporters will stress during the hearing.

"Now more than ever, America needs a strong, nonpolitical and independent central bank with the tools to promote financial stability and to help steer our economy to recovery without inflation," Bernanke wrote.

Bernanke urges Congress to enact reforms Poll: Southerners want federal help, fear for jobs

Cyber Monday: Hope for disappointed stores

NEW YORK (CNNMoney.com) -- The good news for merchants is that more Americans this year turned out to bag Thanksgiving weekend deals than last year. The bad news, however, is that shoppers on average spent less on their purchases compared to a year ago.

For nervous sellers, it's next about Cyber Monday, or the online retail world's version of Black Friday, when millions of people take a few minutes at work to surf the Web to score "doorbuster"-like deals from e-tailers.

About 195 million people shopped in stores and online between Thanksgiving and Sunday, up from 172 million a year ago for the same four-day period, the National Retail Federation (NRF) said Sunday.

But average spending over the weekend dropped to $343.31 per person from $372.57 a year ago. Total retail spending for the holiday weekend was about $41.2 billion, the group said in a report, up marginally from $41 billion last year.

Despite scenes of filled parking lots throughout Black Friday, total sales for the day were just slightly improved over last year. And to illustrate how bargain conscious shoppers were, the NRF said the percentage of shoppers who were at the stores by 5 a.m. Friday was 31.2%, up sharply from 23.

"While retailers are encouraged by the number of Americans who shopped over Black Friday weekend, they know they have their work cut out for them to keep people coming back through Christmas," NRF president and CEO Tracy Mullin said in a statement.

In a surprising trend, department stores beat out discounters as the destination of choice over the weekend. Nearly half, 49.4%, of holiday shoppers visited at least one department store over the weekend, a 12.9% increase from last year, the group said.

About 43.2% of gift buyers headed discounters like Wal-Mart and Target stores. Electronics stores, clothing chains and grocery stores also attracted crowds, the report said.

Sales with a click

It was a stronger picture for Internet retailing.

Web-based purchases totalled $595 million on Black Friday, up 11% from a year ago, making Friday the second heaviest online spending day so far this year, according to a report Sunday from research firm ComScore.

Online shopping will garner more attention Monday -- the so-called Cyber Monday -- when many Americans will troll for deals on the Internet.

The NRF estimates that 96.5 million Americans plan to shop on Cyber Monday this year, up from 85 million in 2008. The group said 88.2 million Americans will shop from home on Monday but plenty of consumers - an estimated 13.5 million - will also look to lock in deals during their workday.

Most retailers who sell online will have special Cyber Monday deals that include one-day sales and free shipping on all purchases.

Despite the hype associated with Cyber Monday, industry experts say the busiest online shopping day tends to be in December, and is the last day that gifts can be shipped to guarantee deliver by Christmas Day.

Among the hot items with strong online sales Friday were the Tom Tom GPS systems, Kodak digital cameras and the Nintendo Wii, according to credit card fraud prevention company Retail Decisions. The company said the busiest single minute for sales Friday was 12:59 p.m. ET, when $5.6 million in products were sold -- a 121% increase from the same time last year.

A survey by a Web performance company, Keynote Competitive Research, said that while all sites experienced slowdowns on Black Friday, there were fewer outages overall than last year. Among the sites it said were the best performing were those of Wal-Mart, Sears, Barnes & Noble and Victoria's Secret, and the online-only sites Overstock.com and Newegg.com.

Under control

Although Black Friday seemed to be missing the usual mayhem associated with it, the good news for merchants was that shoppers eagerly spent money on toys, cashmere sweaters, Snuggie blankets and gadgets at juicy discounts .

"What I've noticed so far is that [consumer] traffic is on par with last year, but people are buying more," said Marshal Cohen, chief retail analyst with market research firm NPD Group.

Compared to previous years, Cohen said the Black Friday atmosphere appeared to "be more tame."

Wal-Mart, which saw Black Friday 2008 tainted by the death of a temporary worker in a shopper stampede in Valley Stream, N.Y., said the day passed without much incident -- although a.store in Upland, Calif., was forced to shut its doors after shoppers got a bit too rowdy.

"We've heard of a few scuffles among customers, but overall it has been a very safe event," a Wal-Mart spokesman said.

Toy story

One closely watched sector during the season is toys. Zhu Zhu, the electronic pet hamster, was flying off shelves at Toys R Us and emerged as the frontrunner for this year's must-have toy. (Black Friday shoppers hear the call of Zhu Zhu)

Toys R Us, the nation's leading specialty toy retailer, opened its stores at midnight on Thanksgiving. CEO Gerald Storch told CNNMoney.com that about 1,000 people lined up on average at his company's stores.

In addition to Zhu Zhu, Storch said other hot sellers included Princess Tiana dolls, from the new Disney (DIS, Fortune 500) animated movie "The Princess and the Frog," as well as video games and crafts products such as the Paperoni 3-D picture set.

0:00/3:44Toys R Us gets aggressive

The retailer has been aggressive in price cutting this season as it does battle with discounters Wal-Mart and Target. "History has shown that economic downturns are a great time for those who are aggressive, so we're very aggressive this year," Storch said.

Jim Fielding, president of Disney Store Worldwide, said Black Friday was a big day for his company's 205 U.S. retail stores. He said hot sellers were toddler dolls, classic dolls, Buzz and Woody action figures from "Toy Story" and $10 plush toys.

"I would say that shoppers are focused on value," said Fielding. "But you could find value at $10 or at $50."

This year, more retailers opened their stores at midnight instead of the typical 5 a.m. Black Friday openings.

Fielding said the extra pre-dawn hours of business worked for Disney stores. "We're able to better manage the demand and spread [customer] traffic throughout the day," he said. "This may not become the norm for Black Friday for all retailers, but I think we will continue to be committed to it for the foreseeable future."

Tough challenge for merchants

The day after Thanksgiving is dubbed "Black Friday" because it traditionally marks the day of the year when retailers finally move out of the red, indicating losses, and into the black, representing profits.

But despite the hype surrounding Black Friday as the "unofficial" start to holiday gift shopping, it's not the busiest shopping day of the year. That day invariably is the Saturday before Christmas, which is Dec. 19 this year.

Still, for retailers, November and December are crucial sales months because the combined period can account for half, or more, of their sales and profits for the full year.

Although retailers know that they're facing an uphill battle to grow sales amid a tepid spending environment, the hope is that this year's holiday season will at least be an improvement from the previous year.

The NRF expects holiday sales to decline 1% versus a 3.4% drop in holiday sales the previous year.

The group maintains that even though many Americans have had a year to adjust to the recession, continued job losses and stagnant income growth are forcing many consumers to restrain their shopping impulses and shop only for necessities.

-- CNNMoney.com staff writer Aaron Smith contributed to this report.

Black Friday shoppers jam Nashville stores for early-bird sales Early shopping tally: Some gems, some coal

Retail Sales

NEW YORK (CNNMoney.com) -- Retail sales in October rose more than analysts expected, the government reported Monday.

The Commerce Department said total retail sales jumped 1.4% last month, compared with September's revised decline of 2.3%. Economists surveyed by Briefing.com had anticipated that October sales would grow 0.9%.

With Black Friday less than two weeks away, retailers were hoping the report would show consumers signaling a willingness to spend during the all-important holiday sales period.

But sales excluding autos and auto parts edged up 0.2%. That's slightly worse than the 0.4% increase predicted by economists, leaving the holiday outlook a bit murky.

"The overall number was higher than estimates, but with an 0.8% downward revision for September it was a bit of a wash," said Adam York, economist at Wells Fargo.

The summer's Cash for Clunkers program, which ended Aug. 24, "made the numbers jump around so much with revisions that it creates a head fake in trying to call a trend," York said.

Holiday retail season looms. Consumer spending accounts for two-thirds of U.S. economic activity, and data are closely watched to determine whether a recovery is underway. With unemployment at a 26-year high of 10.2%, consumers have been cash-strapped for some time.

But with overall retail sales improving, one analyst said the holiday shopping season may come in stronger than expected.

"Consumer spending bottoms out before the job market does [so] this bodes very well," said John Canally, economist at LPL Financial.

But Wells Fargo's York disagreed, saying 2009 will likely be another tough holiday season for retailers.

"Maybe it won't be as bad as last year, but that's not saying much because 2008 was abysmal," York said.

Outlook. Ian Shepherdson, economist at High Frequency Economics, said the report was positive enough that he now expects to see more than a 2% rise in sales over the fourth quarter of last year.

"Looking ahead, though, the latest softening in [consumer] sentiment suggests that's not sustainable," he said in a research note.

York said gains in retail sales will be largely contained until the labor market starts to improve.

"Without those gains in personal income we just can't see any meaningful rise in sales," York said.

Retailers close out best month in year Retail Sales

Bankruptcies spike 33%

NEW YORK (CNNMoney.com) -- The total number of bankruptcies filed in the third quarter surged 33% in 2009 and is at the highest level since 2005, according to data released Wednesday.

The American Bankruptcy Institute, an industry research firm, said 388,485 bankruptcies were filed during the last quarter, compared to 292,291 filed during the same period in 2008, according to data released by the Administrative Office of the U.S. Courts.

Filings for the first nine months of the year climbed 35% to 1,100,035, compared to 841,496 filings during the same period in 2008. A total of 1,117,771 bankruptcies were filed last year.

"The spike in bankruptcy filings for both consumers and businesses reflect the continuing effects of today's weak economy," said ABI executive director Samuel Gerdano in a statement. "With unemployment surpassing 10% and credit to businesses remaining tight, consumers and businesses are increasingly turning to the financial relief of bankruptcy."

Bankruptcies are at the highest level since 2005, when 2,078,415 were filed before Congress passed amendments to the Bankruptcy Code, said ABI.

In October 2005, Congress implemented legislation making it more difficult for filers to prove they should be allowed to clear their debts in a Chapter 7 bankruptcy, forcing more to file under Chapter 13. The law triggered more Americans to rush to file for bankruptcy in the months before the law went into affect.

The ABI report said business bankruptcy filings rose 32% in the third quarter of 2009 to 15,177, and filings for the first nine months of the year totaled 45,510, topping the total 43,546 business bankruptcies filed in 2008.

Personal bankruptcies increased 33% to 373,308 during the last quarter, led by a 42% hike in Chapter 7 filings, which totaled 265,721. The number of consumers filing Chapter 13 bankruptcies rose 15% to 107,142 filings in the third quarter, according to ABI.

During a twelve-month period ending Sept. 30 2009, the report said total filings increased more than 34% to 1,402,816, compared to 1,042,993 in the same period of 2008.

Nevada had the highest rate per capita filings in the country, with 10.49 residents per thousand filing for bankruptcy in the year ended Sept. 30. The state also had the highest rate of filings for chapter 7 bankruptcies at 7.53.

Tennessee had the highest rate of filings for Chapter 13 bankruptcies in the 12-month period with 4.36 people per thousand.

Foreclosures: ‘Tide may be turning’Middle Tennessee business bankruptcies

Saturday, November 28, 2009

Congress' next trick: Pull jobs out of a hat

NEW YORK (CNNMoney.com) -- The economy is not out of the woods, and Congress is feeling pressure to do something about it.

Third-quarter growth was weaker than initially thought. Twenty-nine states reported rising unemployment rates in October. And 1 million people are at risk of losing their unemployment benefits by January.

What can Washington do to help?

Throwing another lifeline - such as extending unemployment benefits and subsidies to help jobless Americans continue paying for health insurance - are likely possibilities.

But the stickiest wicket is how to spur job growth.

The president will hold a jobs summit on Dec. 3 to discuss ideas. House leaders have said they're aiming to vote on a jobs bill by Dec. 18. And Senate Majority Leader Harry Reid, D-Nev., has indicated the Senate would take up a jobs bill after it completes work on health reform.

Several ideas are percolating among economists and lawmakers. But none are clear winners - politically or economically.

There is a limit to what government can do to create jobs, and there is legitimate disagreement about which measures offer the most bang for the buck.

It's also because a jobs bill that adds to the deficit may face headwinds since the country's debt problem - which both Democrats and Republicans played a heavy hand in creating - has become a political hammer to oppose legislation.

In the meantime, the spectrum of views in the debate over whether and how to stimulate job growth is wide.

There are those who say you can't go big enough.

"If you fail to have a program in place sufficient to the task, you end up constantly behind the curve," said James Galbraith, a professor of government at the University of Texas. Galbraith estimates that the country would need to generate 3 million jobs a year for the next five years to get the employment rateback to where it was a few years ago.

Others say the best approach is "do no harm."

The ideas for stimulating job growth so far are "at best neutral and at worst harmful to the economy," said J.D. Foster, a senior fellow at the conservative Heritage Foundation. "The economy needs a dose of confidence and certainty, not random, half-baked ideas."

Foster said it would be better for the administration to make a clear statement that it will not push for any tax increases until the unemployment rate is at or below 7%, something that isn't likely to happen until after the next presidential election. Beyond that, he'd recommend more tax cuts, but recognizes that would be difficult given the country's record-sized deficits.

0:00/4:32Laid off? Don't stay in 401(k)

Whatever Congress decides, no single measure will be a panacea. Here are some of the leading ideas being discussed.

Offer a payroll tax holiday: Temporarily suspending the payroll tax - which is a 12.4% tax on workers' first $106,800 of wages - could accomplish two goals, supporters say.

Employers, who typically pay half of the tax, would have more money to hire people. Workers, who typically pay the other half, would have more money to spend on consumer goods, which in turn can help create jobs.

A payroll tax holiday would be a particular boon for small business owners and the self-employed, since they foot the full 12.4% tax.

Princeton economist Alan Blinder said a payroll tax holiday "probably will induce some hiring" but not necessarily enough to justify the expense since there's no guarantee the employer will use the extra money to hire more people.

"It's really a less efficient thing to do than the new jobs tax credit," Blinder said.

Create a new jobs hiring credit: The idea behind a hiring credit is to offer employers a sweetener if they bite the bullet and hire more people. The sweetener would come in the form a tax credit for every new hire.

Skeptics of the credit say there are several potential pitfalls:

Employers who were already planning to hire would benefit disproportionately from the credit.The amount of the credit, which isn't likely to exceed $3,000 to $5,000 per hire, may not be enough for employers to justify the costs of bringing on a full-time employee.Unless the credit's parameters are carefully structured, it would be easy for employers to game the system by, for instance, firing and then re-hiring the same worker to qualify for the credit.

The latter can be addressed fairly easily by only making the credit available for hires that increase the total number of workers on a company's payroll, Blinder said. So the company with 100 workers would only get the credit for hiring employees that push the total number of workers over 100.

Help close state and local budget shortfalls: With jobless rates rising in many states, revenue has fallen, leaving many states with yawning budget deficits.

Mark Zandi, chief economist of Moody's Economy.com, estimates that state and local governments are likely to face a combined shortfall of $150 billion in fiscal year 2011, which begins next summer.

"The hole is turning out to be larger than we thought and deeper," Zandi said at a conference held by the liberal Economic Policy Institute last week.

And it could cause the loss of up to 900,000 jobs in 2010 alone, according to another liberal think tank, the Center on Budget and Policy Priorities.

That's why Zandi, who was an economic adviser to John McCain during the 2008 presidential election, and Galbraith think the federal government could help curtail job loss by agreeing to send more aid to close state and city budget gaps.

Galbraith thinks the federal government should plug the hole completely. Zandi thinks Washington should send another $75 billion, which would augment the $40 billion the states will have coming to them as a result of the stimulus legislation passed in February. That would shrink to $35 billion the hole that states would then have to address.

Offer public-service employment: Blinder and others have suggested the federal government put money towards creating new public-service jobs.

But the new jobs would have to be not only at the federal level but at the state and local level as well. That's because the economy needs several million jobs and the civilian federal workforce is already at 1.4 million, Blinder said.

He is dubious that number could be doubled, and even if it was, it's still wouldn't make a big enough dent. "So in terms of where the jobs are, it's at the state and local level," Blinder said.

Unemployment rates rise in 29 states Poll: Southerners want federal help, fear for jobs

Health perks for the unemployed

NEW YORK (CNNMoney.com) -- Under the weather and out of a job? You could be eligible for free health services like flu shots and prescription drug refills.

For those who say they cannot afford or cannot access health insurance, there is a welcome reprieve in the form of health-related freebies from the government and a few private companies. The primary requirement: proof of unemployment.

Since the start of the recession, more than 7 million jobs have been lost and for many, along with their job, also went their health insurance.

Nearly 46 million Americans have no health insurance at all, and that number is increasing as unemployment reaches its highest level in 26 years. And COBRA subsidies thathelpcover the jobless are set to expire soon.

"Overwhelmingly the biggest source of health insurance is through employers," explained Judy Conti, a federal advocacy coordinator for the National Employment Law Project (NELP). For those out of a job, and even with a COBRA subsidy, health insurance coverage is still way too expensive for far too many people, she said.

What's out there

At federally-funded health centers around the nation, those without health insurance can receive checkups, immunizations and prescription drugs at a discounted rate. Locations can be found on the department of Health and Human Services' Web site.

In addition to discounted health centers subsidized by the government, there are also a slew of new programs thanks to corporate funding that are absolutely free, and available on a limited basis.

Earlier this year, Walgreens (WAG, Fortune 500) launched its Take Care Recovery Plan, which allows job seekers to get free health care services at Take Care Clinics until the end of the year. The clinics are located in select Walgreens stores, and can treat a range of ailments from strep throat to allergies and ear infections.

The offer is only available to pre-existing Take Care Clinic patients, and their families, who have become unemployed since March 31 and don't have health insurance. Unemployed workers must provide a federal or state unemployment benefits confirmation letter, unemployment benefit check stub and confirmation of their insurance coverage termination.

Pharmaceutical giant, Pfizer (PFE, Fortune 500), also introduced a medicine assistance program in July where the unemployed and their families can continue to get Pfizer medications, like Lipitor and Viagra.

Only those who became unemployed since the start of the year, don't have prescription drug coverage and were taking a Pfizer medication for at least three months prior are eligible to apply. To qualify, unemployed workers need to fill out an application and submit either a state unemployment benefits confirmation letter, unemployment benefit check stub or employer termination letter.

Those who apply before the end of the year and enroll in the program will receive their medications at no cost for up to one year, or until they become insured.

And in the midst of flu season, CVS (CVS, Fortune 500) is offering 100,000 free seasonal flu shots to the unemployed. Vouchers have been distributed at employment agencies and can be redeemed at CVS pharmacy flu clinics or health care centers.

There are also additional services out there that unemployed workers may qualify for, including more prescription drug discounts,noted Chantel Sheaks, a principal of government affairs at Buck Consultants in Washington, D.C. For those who are interested, Sheaks suggests talking to their doctor or drug manufacturer to see if they apply.

0:00/4:06Public option good for business

Services like these can make a big difference in people's lives, according to NELP's Conti. "In the absence of health insurance, these sort of stop gap measures are really phenomenal."

"I would just hate for anyone at a policymaking level to mistake this as an adequate replacement for full health insurance," she cautioned. "It's a whole lot better than nothing, but it's not as good as people need."

How to make wise health plan choices Health insurance tax = higher wages?

Early shopping tally: Some gems, some coal

NEW YORK (CNNMoney.com) -- Although malls around the country reported a rush of shoppers and filled parking lots throughout Black Friday, total sales for the day only saw a slight - and not a robust - improvement over last year.

Retailers registered about $10.66 billion in sales Friday, up 0.5% from a year ago, according to a report Saturday from sales and traffic tracking firm ShopperTrak.

Regionally, the firm said year-over-year Black Friday sales rose 4.7% in the West, increased 1.3% in the Midwest, edged up 0.6% in the South, but declined 4.9% in the Northeast, where there was rain in many sections.

"With Black Friday's performance it looks like November will be a positive month for retailers compared to last year, which is an encouraging sign," ShopperTrak co-founder Bill Martin said in the report.

"Friday's relatively strong performance isn't always a bellwether for the entire season, but we believe the 1.6% increase we originally predicted for the holiday season remains intact," he added.

The firm said it did not yet have data on how many consumers hit stores on Black Friday, even as retailers opened their doors early again Saturday in their continuing effort to lure customers.

Taubman Centers -- which operates such malls as the Woodfield Mall in Schaumburg, Ill., and the Stamford Town Center in Connecticut -- said a majority of its centers reported year-over-year sales increases Friday, with steady traffic into the evening hours.

"The hot categories throughout the evening included apparel, electronics, shoes and boots, and bath and beauty predominantly," said Karen Mac Donald, Taubman's communications director, in an e-mail.

J.C. Penney said Saturday that sales were strong at stores across the country on Black Friday. Top sellers included gemstone and gold jewelry, luggage sets, women's cashmere-blend pea coats and a device that projects TV images onto a blank wall.

Sales with a click

It was a stronger picture for Internet retailing. The average online order on Black Friday rose 35% from last year, to $170.19, according to online retail analyst Coremetrics -- an indication that people may be looking to buy gifts after a year of economic woes.

"The healthy jump in the average amount of money people are willing to spend online this year suggests consumers have adjusted their shopping patterns to the reality of the economic downturn," said John Squire, chief strategy officer, Coremetrics, in a statement. "They're thriftier, they're savvier and every one of them wants to be the best bargain hunter out there."

While people spent more online, Coremetrics said they were spending less time browsing, indicating that they know what they want, and how much they want to pay for it.

Online shopping will garner more attention Monday -- the so-called Cyber Monday -- when many Americans will take advantage of computers at work to shop for gifts.

"What I've noticed so far is that [consumer] traffic is on par with last year, but people are buying more," said Marshal Cohen, chief retail analyst with market research firm NPD Group.

"They are going into stores with the pure intention of spending money. They have their stores, products and prices all picked out," he said.

The National Retail Federation (NRF) is expected to release its report Sunday estimating how much shoppers spent over the Black Friday weekend and where they shopped.

Compared to previous years, Cohen said the Black Friday atmosphere appeared to "be more tame."

"We've heard of a few scuffles among customers, but overall it has been a very safe event," a Wal-Mart spokesman said.

"Look, retailers have been educating consumers for days before Black Friday on what their deals are going to be and on what items," said Cohen. "That's partly why we're not seeing the frenziness."

Power tools and Snuggies selling out

Sears (SHLD, Fortune 500) spokesman Tom Aiello said he thought Black Friday crowds outside its stores were "a little bit more than last year."

The department store chain reported an average of 300 to 400 shoppers lined up for its 4 a.m. opening Friday.

The top sellers at Sears included a Craftsman drill set for $39.99, down from its original price of $79.99, as well as home-related goods such as luggage, comforters and the Snuggie blanket.

"Snuggies are selling fast for $9.99 at out Kmart stores," Aiello said. "And our layaway section is jammed. People are buying the special deals and putting them on layaway."

"I would say that shoppers are focused on value," said Fielding. "But you could find value at $10 or at $50."

This year, more retailers opened their stores at midnight instead of the typical 5 a.m. Black Friday openings.

Elsewhere, Zhu Zhu, the electronic pet hamster, was flying off shelves at Toys R Us and emerged as the frontrunner for this year's must-have toy. (Black Friday shoppers hear the call of Zhu Zhu)

0:00/3:44Toys R Us gets aggressive

Tough challenge for merchants

Still, for retailers, November and December are crucial sales months because the combined period can account for half, or more, of their sales and profits for the full year.

The NRF expects holiday sales to decline 1% versus a 3.4% drop in holiday sales the previous year.

Overall, more bargain hunters are expected to hit stores on Black Friday and the weekend. The total is expected to be about 134 million, up from 128 million a year ago, according to the NRF.

"More shoppers will come out today than a year ago," said Britt Beemer, a retail industry expert and chairman of America's Research Group. "But consumers are so concerned about money that if and when the deals are gone, so are they."

-- CNNMoney.com staff writers David Ellis and Aaron Smith contributed to this report.

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Manufacturing (ISM)

NEW YORK (CNNMoney.com) -- A key index of U.S. manufacturing activity jumped in October, reaching its highest level in three and a-half years, a purchasing managers' group said Monday.

The Tempe, Ariz.-based Institute for Supply Management's (ISM) manufacturing index rose to a reading of 55.7 in October from 52.6 the month before. It was the highest reading since April 2006 when the index registered 56.

Economists were expecting a reading of 53, according to consensus estimates gathered by Briefing.com.

"This is another clear sign the recession is over, and the recovery has begun," said Adam York, an economist at Wells Fargo.

The monthly report is a national survey of ISM members, who are purchasing managers in the manufacturing field. Index readings above 50 indicate growth, while levels below 50 signal contraction. Readings below 41.2 are associated with a recession in the broader economy.

The index first showed growth in August after 18 months of contraction. It dipped slightly in September from the previous month, but has held above the level indicating growth for three months in a row.

"The jump in the index was driven by production and employment," said Norbert Ore, chair of the ISM's manufacturing business survey committee. "Overall, it appears that inventories are balanced and that manufacturing is in a sustainable recovery mode."

The employment index rose to 53.1, indicating growth for the first time in 14 months. The ISM says an employment index above 49.7 is "generally consistent" with an increase in government jobs data in the manufacturing sector.

Ore said the jump in manufacturing employment was due to "some callbacks and opportunities for temporary workers."

On Friday, the Labor Department is expected to report that employers cut payrolls by 175,000 jobs in October after a loss of 263,000 jobs in September, according to a consensus of economists surveyed by Briefing.com. The unemployment rate is expected to rise to 9.9% from 9.8%.

0:00/0:56China manufacturing growth

Production in the manufacturing sector rose for the fifth month in a row, led by strength in plastics and rubber products, furniture and apparel.

The gain in production came as the index of new orders for manufactured goods rose for the fourth consecutive month.

The ISM tracks new orders, production, employment, supplier deliveries, inventories, customers' inventories, the backlog of orders, prices, new export orders, imports and buying policies.

Of the 18 manufacturing sectors reporting, 13 posted growth -- including categories such as petroleum and coal products, apparel and transportation equipment.Sectors reporting contractions included metals, mineral products and wood products.

A government report showed last week that theU.S. economy grew at a 3.5% annual rate in the third quarter, ending a string of declines over four quarters that resulted in the most severe slide since the Great Depression.

Economy’s rebound not as strong as first thought Manufacturing (ISM)

Should you be paid for being on call?

NEW YORK (Fortune) -- Dear Annie: Late last year, the software company where I worked as a full-time webmaster had to lay people off, but they kept some of us on as independent contractors. My boss offered me a deal where I would be doing the exact same job as before, only paid by the hour instead of on salary, with no benefits.

When I agreed to this, I was so relieved not to be unemployed that I accepted, even though there was nothing in writing. But now I'm starting to wonder if I made a mistake. For one thing, I'm expected to be on call at all hours of the day and night, but I don't get paid for being on call, only for the 40 hours a week that I'm in the office. (I didn't get paid for overtime before either, but I was a salaried employee then, with benefits, etc.) Is this legal? - Dazed and Confused

Dear Confused: Oh, dear. This is complicated. First of all, if you are truly an independent contractor and not an employee, then you are legally entitled to whatever is in your contract, period. Since you don't have anything in writing, whatever you agreed to in that conversation with your boss is what you get. (Oral contracts are legally binding.)

If overtime was overlooked, and you feel you are eligible for it now that you are compensated by the hour instead of on salary, then by all means sit down with your boss and discuss it.

But be aware that you are wading into a quagmire. For one thing, a fog of confusion surrounds the whole issue of who is entitled to overtime pay and who isn't - even among regular employees, many of whom have been working extra hours since the economy went south.

"More and more employees lately are asking about payroll issues, especially overtime," says Dan Nash, a Washington, D.C., partner in Akin Gump Strauss Hauer & Feld. It doesn't help that employers often are confused too about where to draw the line between "exempt" (from overtime) and "non-exempt" (hourly, entitled to overtime pay) under the federal Fair Labor Standards Act (FLSA) and a welter of similar, but not identical, state laws.

In general, employees are considered exempt from overtime if they earn a salary and if their primary duties are executive, defined in part as managing two or more full-time employees; or if they are salaried administrators who exercise "discretion and independent judgment" in important business matters, the FLSA says; or if they are salaried professionals, a designation that covers people like lawyers with advanced degrees but is also a bit of a catchall, in that salaried "creative" people (artists, writers) also fall into this category. As webmaster, some of your duties may qualify for overtime exemption while others may not.

0:00/3:18When playing is your job

On top of that, your claim to overtime for being "on call" would be iffy even supposing you were a full-time employee. "One issue here is, what is work?" says John Robinson, head of the employment law practice at Fowler White Boggs in Tampa. "The technology is way ahead of the law." If you are expected to be reachable by phone at all times, but you can still go to a movie, for example, you're less likely to be legally viewed as "working" than if you were required to stay in the office after hours.

"Many companies see the on-call issue as analogous to a firefighter's job," Robinson says. "Most of the time, a firefighter is off-duty but on call, hanging around the firehouse, cooking, sleeping, or whatever. What that person really gets paid for is the relatively small, but crucial, amount of time he spends walking into a burning building with an ax. A webmaster, likewise, has slow times and busy times. Should he be compensated for the times when he is available but not busy? The Department of Labor hasn't ruled on that."

Now add to all this the fact that you are classified as an independent contractor, even though you still put in 40 hours a week at the office and your job duties are the same as before you got laid off. The Internal Revenue Service frowns on this. In fact, the IRS has announced it will audit 6,000 randomly selected employers starting in February, looking for "contractors" who are actually employees. This will be the first such widespread crackdown since 1984, when the IRS said employers had misclassified 3.4 million workers, costing the Treasury $1.6 billion in payroll taxes that year alone. If you are being misclassified, your current deal may be in jeopardy: The tax folks could insist that the company either put you back on the regular payroll or sack you.

Of course, your firm might opt for the former, but why take chances? Here's what you should do: First, talk to your boss and ask to have your current arrangement spelled out in writing. To protect both you and the company in the event of an IRS audit, make sure the written contract spells out exactly how your work differs - even if not by much - from what you did as a full-time employee. For instance, if you used to be in charge of hiring and firing in your department, and now you're not, the contract should say that.

While you're at it, since the company evidently wants to keep you around (or they'd have laid you off along with your former co-workers), see if you can appeal to your boss's sense of fairness and work out a provision that extends your hourly wage beyond your usual 40. Your case will be stronger if you limit your request to those hours when you are actually working, not just on call. It will also help if you have a written record of exactly how many hours you've been putting in without pay.

Make sure a lawyer (the company's or your own) looks the agreement over to make sure nothing in it runs afoul of IRS rules about who is a contractor and who isn't.

Good luck.

Talkback: Should employees get extra pay for being on call? Tell us on Facebook, below.

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Black Friday shoppers hear the call of Zhu Zhu

NEW YORK (CNNMoney.com) -- Zhu Zhu hamsters proved themselves the undisputed kings of Black Friday.

Zhu Zhu fanatics were so numerous on Thanksgiving night, that they were given their own line in front of the flagship Toys R Us store in New York's Times Square. Hundreds of shoppers queued for hours ahead of the midnight opening, specifically so they could get their hands on the robotic rodents.

"It's the only thing my little sister wants for Christmas and she is going to get it," said Kaitlynn Blyth, a communications student at Pace University in New York City, shortly before the doors opened.

Blyth and her cousins, Hillary Blyth and Brittney Fusco from Albany, N.Y., had been waiting since 7:30 p.m., making them the first in line for Zhu Zhu toys, rated by the National Retail Federation as among the 10 hottest for the holiday season. Everyone in the Zhu Zhu line held a red ticket given to them by a Toys R Us staffer, guaranteeing them the purchase of a furry little automaton.

When the doors opened, they were funneled directly to the Zhu Zhu section, and the mob scene there stood in stark contrast to the New Moon section, its T-shirts and action figures largely ignored despite the movie's hype. (Black Friday crowds eager to spend)

0:00/2:45Zhu Zhu's hot!

But Blyth was not the first Black Friday shopper to arrive at the world's largest toy store. That distinction went to Frank Davila of Manhattan, who showed up at 5 p.m. with three of his family members. They headed the doorbuster line -- the shoppers who made the mad scramble into the store at the stroke of midnight.

Davila and the other doorbusters weren't there specifically for Zhu Zhu hamsters. They were there for discounts. Davila said he planned to spend $600 on a wide assortment of toys for his eight kids.

"We're here to get some Elmos, some action figures, My Little Pony for our daughters, whatever we can get," he said.

The recession didn't seem to dampen shoppers' enthusiasm. Toys R Us spokeswoman Kathleen Waugh noticed that the lines seemed to be longer than in previous years, when the doors typically opened at 5 a.m. on Black Friday.

"[There are] a lot more than last year," said Waugh. "I think the midnight hour is much more appealing to most people, because they just stay up, instead of having to get up later."

Shoppers thronged the three floors of the store, laden with enormous tote bags full of StarWars and Lego toys, Transformers and Hannah Montana dolls. Hundreds of shoppers formed a slow-moving line that snaked through the video game section, grabbing Wii accessories, DVDs and PS3s and the Xbox 360 with Modern Warfare 2.

"They got some good Black Friday s*** going on," said Sean Jones, who made the trek from Brooklyn to load up on toys for his toddler-aged son and daughter. "They got some stuff for a dollar. You can't beat that."

This year, Black Friday retail sales are expected to outpace 2008, with 5% more shoppers participating.

0:00/2:45Will robots rescue the holidays?

Michael Zorek, a Manhattan father of two children, left the store after paying $132 for an assortment of toys, including a Leapster Learning Game System and a Disgusting Science Kit. He said that he got almost everything on his shopping list.

"I didn't get the Disney Princess Purse, but I got the Tinkerbell one instead," he said. "You get what you get and you don't get upset."

Zorek said he would take a nap and then go to the 5:30 a.m. opening of the Gamestop store.

"I'm burning the candle at both ends, but if you're going to save $40 here and $40 there in this economy, it's worth it," he said.

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Friday, November 27, 2009

Black Friday shoppers hear the call of Zhu Zhu

NEW YORK (CNNMoney.com) -- Zhu Zhu hamsters proved themselves the undisputed kings of Black Friday.

0:00/2:45Zhu Zhu's hot!

Davila and the other doorbusters weren't there specifically for Zhu Zhu hamsters. They were there for discounts. Davila said he planned to spend $600 on a wide assortment of toys for his eight kids.

"We're here to get some Elmos, some action figures, My Little Pony for our daughters, whatever we can get," he said.

"[There are] a lot more than last year," said Waugh. "I think the midnight hour is much more appealing to most people, because they just stay up, instead of having to get up later."

This year, Black Friday retail sales are expected to outpace 2008, with 5% more shoppers participating.

0:00/2:45Will robots rescue the holidays?

"I didn't get the Disney Princess Purse, but I got the Tinkerbell one instead," he said. "You get what you get and you don't get upset."

Zorek said he would take a nap and then go to the 5:30 a.m. opening of the Gamestop store.

"I'm burning the candle at both ends, but if you're going to save $40 here and $40 there in this economy, it's worth it," he said.

Afghanistan: Pay for it or charge it?

NEW YORK (CNNMoney.com) -- War is expensive, and it's about to get more so if the U.S. government escalates its military efforts in Afghanistan.

President Obama is set to announce his strategy next week. And the question of cost hovers in the background of the difficult decision he faces.

Over the past eight years, the nearly $1 trillion cost of the military's efforts in Iraq and Afghanistan was essentially charged to the national credit card.

Will it be different this time?

There's some chance lawmakers may opt to pay the bill as it comes due, rather than letting the balance and interest accrue. It's not the first time the idea has come up, but it may be the first time the idea is given serious consideration.

A big part of the context for deciding whether and how to pay for a buildup are the growing deficits that have become a political and financial albatross. The country's accumulated debt is expected to rise from $12 trillion today to $21 trillion by the end of 2019.

Some lawmakers are pushing for a war tax. Peter Orszag, the White House budget director, took part in the latest war council meeting. And Obama is expected to raise the cost issue in his Tuesday evening address at West Point.

Since 2001, close to $1 trillion has been appropriated by Congress - and borrowed by Treasury - to pay for U.S. war efforts in Iraq and Afghanistan, according to a report from the Congressional Research Service published in September.

Total spending on the global war on terror, including missions in Iraq and Afghanistan, could approach $2 trillion by 2019 depending on the level of military involvement, the CRS reported.

White House spokesman Robert Gibbs on Wednesday told reporters that Obama's address would stress that further engagement in Afghanistan would not last another eight years. Gibbs also characterized the increase in troops as "very, very, very expensive" in terms of potential lives lost and dollars spent.

The White House estimates a troop increase will cost $1 billion a year for every 1,000 troops. So if Obama chooses to increase troops by as much as 40,000, that's $40 billion a year. That would be on top of the costs incurred for the troops and operations already on the ground, including the costs of any drawdown in Iraq.

"That's in addition to what we already spent in Afghanistan and Pakistan. That also does not include training and it doesn't include maintenance of a security force," Gibbs said.

Enter David Obey, D-Wis., chairman of the House Appropriations Committee, and other leading Democratic congressmen who have proposed a graduated war surtax beginning in 2011 to pay for U.S. military efforts going forward. The amount of tax collected would have to be sufficient to cover the full war costs of the previous year.

The surtax would start at 1% for anyone with taxable income and increase gradually up the income scale to as much as 5% for the highest-income households.

0:00/3:42Afghanistan's war on drugs

The only people exempt from having to pay the war surtax would be members of the military who have served in combat since Sept. 11, 2001, their families and the families of military members who died in combat.

"Regardless of whether one favors the war or not, if it is to be fought, it ought to be paid for," Obey said in a statement. "The only people who've paid any price for our military involvement in Iraq and Afghanistan are our military families."

Separately, Obey noted that if the cost of the Afghan war isn't paid for it will "wipe out every other initiative that we have to try to rebuild our own economy."

House Speaker Nancy Pelosi, D-Calif., meanwhile, has acknowledged the issue is very much on the minds of legislators.

"Let me say that there is serious unrest in our caucus about 'Can we afford this war?' " she told reporters on Tuesday.

In the Senate, Armed Service Committee Carl Levin, D-Mich., told Bloomberg Television last week that he could support a war tax levied on those making more than $200,000.

The White House, however, remains mum about what tax if any the president might support to pay for future efforts in Afghanistan.

- CNN's Deirdre Walsh and Jill Dougherty contributed to this report.

Health bill foes pursue economic study Obama: More job losses to come

Consumer Confidence

NEW YORK (CNNMoney.com) -- A key measure of consumer confidence continued to slip in October, with consumers' gauge of the current economic situation falling to a 26-year low, a research group said Tuesday.

The Conference Board, the New York-based research group said its Consumer Confidence Index fell to 47.7 in October from an upwardly revised 53.4 in September.

Economists were expecting the index to increase to 53.5, according to a Briefing.com consensus survey. The figure, which is based on a survey of 5,000 U.S. households, is closely watched because consumer spending makes up two-thirds of the nation's economic activity.

The index component that evaluates consumers' judgment of the present situation dipped to 20.7 in October, the lowest since the 17.5 measured in February 1983. It stood at 23 in September.

"Consumers' assessment of the present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment," said Lynn Franco, director of the Conference Board Consumer Research Center.

Employers continued to cut jobs from their payrolls in September, as the unemployment rate rose to 9.8% and hit another 26-year high in September, according to a report from the Labor Department earlier this month.

The percentage of those claiming that jobs are currently hard to get reached new high of 49.6%, while the number of consumers claiming that jobs are "plentiful" hit a new low at 3.4%.

"It is surprising how uniformly weak this report was," said Mark Vitner, an economist at Wells Fargo. "The expectations had gotten ahead of themselves. Everyone thought that economy would follow the rebound in the stock market. But now that the rebound has leveled off, folks doubt whether conditions will get better."

Recovery isn't near for consumers. The expectation index, which measures consumers' outlook over the next few months, declined to 65.7 from 73.7 last month. Similarly, the percentage of those expecting the job market to improve edged lower to 16.3% from 18%.

0:00/6:50Consumer spending still low

The number of consumers expecting their incomes to increase also fell to 10.3% from 11.2%, suggesting that shoppers will likely limit their holiday spending, said Franco. The average amount consumers spend on holiday-related shopping will drop by $22.27 to $682.74, said the National Retail Federation in a report last week.

The outlook for business conditions also grew more pessimistic in October, with the percentage of consumers expecting conditions to worsen climbing to 18.3% from 14.6%.

The overall index remains at historically low levels. A reading above 90 indicates the economy is solid, and 100 or above signals strong growth.

Vitner expects the main index to hover around 50 for the next several months.

"We need to see a real improvement in employment conditions. Layoffs need to stop rising and hiring needs to pick up," he said. "The soonest that we think that consumers' confidence will see a sustained rise would be late spring of next year."

Economists predict GDP, the broadest measure of economic activity, rose at an annual rate of 3.2% in the third quarter of this year after a 0.7% drop in the second quarter. The government will release its advance third-quarter GDP report Thursday.

Consumer Confidence Stocks decline in early morning trading

Thursday, November 26, 2009

Jobless claims plummet to 14-month low

NEW YORK (CNNMoney.com) -- The number of first-time filers for unemployment insurance fell to 466,000, the lowest level in 14 months, according to a government report released Wednesday.

That's the lowest number in the Labor Department figures since the week ended Sept. 13, 2008, and a decrease of 35,000 from the previous week's 501,000.

A consensus estimate of economists surveyed by Briefing.com expected 500,000 new claims in the week ended Nov. 21.

The 4-week moving average of initial claims was 496,500, down 16,500 from the previous week's average of 513,500.

The report is usually released on Thursdays, but it was posted a day early this week because of the Thanksgiving holiday.

"It seems to be a statistical pop," said Tim Quinlan, economist at Wells Fargo. "As much as I'd like it to continue, I don't see claims continuing to fall at this pace."

Still, Quinlan said he expects a gradual decline in initial claims throughout the coming months.

"If you told the average person that we're five or six months into a recovery, they'd probably want to shoot you because it doesn't feel that way to them," Quinlan said. "But we are seeing more encouraging signs overall, and unemployment claims will be part of that."

Continuing claims: The government said 5,423,000 people filed continuing claims in the week ended Nov. 14, the most recent data available. That's down 190,000 from the preceding week.

The 4-week moving average for ongoing claims fell by 98,500 to 5,712,250.

But the slide in continuing claims may signal that more filers are falling off those rolls and into extended benefits.

Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, nor people who have exhausted their benefits.

Administration efforts. Earlier this month, the Labor Department reported that the nation's unemployment rate rose above 10% for the first time since 1983.

A separate government report said 1 million people could lose their unemployment benefits in January if they don't receive further extended federal aid. President Obama signed a bill to extend government-provided unemployment insurance by up to 20 weeks, but the law applies only to those whose benefits will expire by the end of 2009.

The Obama administration said earlier this month that it will hold a jobs forum on Dec. 3. Obama will meet with labor representatives, financial experts and other business leaders to discuss the continued problems with unemployment.

State-by-state data: Only one state reported an initial claims increase of more than 1,000 for the week ended Nov. 14, the most recent data available.

Claims in Florida rose by 1,313, which a state-supplied comment attributed to layoffs in the construction, trade, service and manufacturing sectors.

Twenty-two states said that claims fell by more than 1,000. California reported that claims declined by 7,987; Texas had 4,710 fewer claims; Pennsylvania saw a dip of 4,321; Wisconsin had 2,716 fewer claims; and Ohio claims shrank by 2,486.

Jobless claims hold at 10-month low Obama calls for jobs forum next month

Consumer Confidence

The Conference Board, the New York-based research group said its Consumer Confidence Index fell to 47.7 in October from an upwardly revised 53.4 in September.

The index component that evaluates consumers' judgment of the present situation dipped to 20.7 in October, the lowest since the 17.5 measured in February 1983. It stood at 23 in September.

The percentage of those claiming that jobs are currently hard to get reached new high of 49.6%, while the number of consumers claiming that jobs are "plentiful" hit a new low at 3.4%.

0:00/6:50Consumer spending still low

The outlook for business conditions also grew more pessimistic in October, with the percentage of consumers expecting conditions to worsen climbing to 18.3% from 14.6%.

The overall index remains at historically low levels. A reading above 90 indicates the economy is solid, and 100 or above signals strong growth.

Vitner expects the main index to hover around 50 for the next several months.

Economists predict GDP, the broadest measure of economic activity, rose at an annual rate of 3.2% in the third quarter of this year after a 0.7% drop in the second quarter. The government will release its advance third-quarter GDP report Thursday.

Stocks decline in early morning trading Consumer Confidence

Fed more bullish on recovery

NEW YORK (CNNMoney.com) -- The Federal Reserve on Tuesday raised its estimate for economic growth next year and forecast lower unemployment ahead, although the jobless rate will stay uncomfortably high for at least the next three years.

The projections were included in the minutes of the Fed's Nov. 3 and 4 meeting. The forecast shows the central bank expects gross domestic product, the broadest measure of the nation's economic activity, to grow between 2.5% to 3.5% in 2010. That's a bit more bullish than the 2.1% to 3.3% growth it had forecast for the period back in June.

The unemployment rate, which hit 10.2% in October according to the Labor Department's latest reading, is expected to improve to between 9.3% to 9.7% for all of 2010. The Fed's June forecast was for 2010 unemployment between 9.5% to 9.8%.

The central bank's forecasts don't show the labor market getting a lot better in the next few years. Its 2011 forecast is for unemployment between 8.2% to 8.6%, while 2012 unemployment is expected to be between 6.8% to 7.5%, still above the average 6% annual unemployment rate recorded by the Labor Department over the last 30 years.

Going forward from 2012, the forecast is for the unemployment rate to improve to between 5% to 5.2%, levels not seen since the first few months of the latest recession. But that long-term employment outlook is slightly more bearish than the Fed's previous estimate of a 4.8% to 5% long-term unemployment rate.

Keith Hembre, chief economist First American Funds, said the slightly more optimistic numbers in the forecast are more bullish than the commentary in the minutes, which discuss many areas of weakness and uncertainty about the state of the recovery.

"They've had a tendency to be overly optimistic (in the numerical forecasts), and that's likely the case again today," he said. For example, a year ago the Fed's forecast was projecting that unemployment in 2009 would come in at between 7.1% to 7.6%. Unemployment hit the upper end of that forecast, 7.6% in January and has risen steadily from there.

Hembre said the slightly more bullish numbers from the Fed shouldn't be taken as a sign that the central bank is getting close to raising rates or removing other programs it has put in place to pump trillions of cash into the economy.

While Fed officials have said they believe that the recession that started in December 2007 likely ended at some point this summer, there have been repeated warnings that growth would be somewhat sluggish going forward. Fed Chairman Ben Bernanke recently said economic headwinds, including tight credit and continued weakness in the labor market would stop growth "from being as robust as we would hope."

The Fed's forecast comes the same day the Commerce Department lowered its estimate for the third quarter's GDP growth rate to 2.8% from its earlier reading of 3.5%.

Despite the lower unemployment estimates released Tuesday, the minutes they were attached to said that Fed "staff boosted its projection for the unemployment rate over the next several years." Those projections were more detailed than the annual estimates spelled out in the summary.

The Fed policymakers were particularly concerned that the forecasts were more uncertain than normal, and they were worried about a sluggish recovery.

"Business contacts continued to report plans to be cautious in hiring and capital spending even as demand for their products increased," according to the minutes.

But Fed policymakers seemed to be more optimistic than they had been at their late September meeting, when they believed there was a greater risk of the economy not living up to the forecasts. Now they believe there is roughly equal chance that the economy could do better than expected as they are worried about it falling short.

Economy’s rebound not as strong as first thought Job Growth

Manufacturing (ISM)

NEW YORK (CNNMoney.com) -- A key index of U.S. manufacturing activity jumped in October, reaching its highest level in three and a-half years, a purchasing managers' group said Monday.

Economists were expecting a reading of 53, according to consensus estimates gathered by Briefing.com.

"This is another clear sign the recession is over, and the recovery has begun," said Adam York, an economist at Wells Fargo.

Ore said the jump in manufacturing employment was due to "some callbacks and opportunities for temporary workers."

0:00/0:56China manufacturing growth

Production in the manufacturing sector rose for the fifth month in a row, led by strength in plastics and rubber products, furniture and apparel.

The gain in production came as the index of new orders for manufactured goods rose for the fourth consecutive month.

The ISM tracks new orders, production, employment, supplier deliveries, inventories, customers' inventories, the backlog of orders, prices, new export orders, imports and buying policies.

A government report showed last week that theU.S. economy grew at a 3.5% annual rate in the third quarter, ending a string of declines over four quarters that resulted in the most severe slide since the Great Depression.

Manufacturing (ISM)Economy’s rebound not as strong as first thought

Fending off empty holiday shelves

NEW YORK (CNNMoney.com) -- With sales slow and credit tight, small merchants are scrambling to stock their shelves for the year's biggest shopping season.

Retailers traditionally borrow money to buy holiday inventory. But credit for small businesses has dried up this year, and with the recession slowing sales, few merchants have cash on hand. The crunch is forcing business owners to find new ways to keep running.

For a handful of New York City retailers in one hard-hit stretch of Brooklyn, a small community lender is playing the role of Santa Claus. Lesia Bates Moss, president of Seedco Financial Services, noticed an ever-increasing number of vacant storefronts along Atlantic Avenue. In response, she hosted a meeting with a dozen area retailers to find out how her organization could help.

One common problem the merchants cited was getting enough credit to buy sufficient holiday inventory. So Seedco Financial, a nonprofit that specializes in financing for underserved communities, launched a streamlined holiday program: Retailers who could provide a marketing plan for spending the money and driving foot traffic would get fast loans.

On Monday, Seedco staffers started delivering checks. A typical loan request is for around $20,000, to be repaid over the next year at interest rates of 6% to 10%.

"It doesn't take a lot in the way of capital access to help these businesses," Moss said. "We really needed to get money into the hands of these merchants before Black Friday, so they could stock their stores."

Toys and beer glasses: Karen Zebulon, the owner of toy and clothing retailer Gumbo on Atlantic Ave., is one of Seedco Financial's borrowers.

"Especially this year, because we have had such hard times, we really need a boost," she said. "If I can really strategize and plan and buy the right merchandise, I think it can be a turning point for me."

Zebulon plans to ramp up her inventory of toys, because even in tight times, customers continue to spend on kids. She's impressed at how quickly Seedco Financial got cash into her hands.

"This was -- you could say -- a godsend," she said. "It is saving me and saving a lot of other merchants that are receiving the loans." Without the financing, she would have been pulling a string of all-nighters trying to handcraft toys to stock her shelves.

Artez'n Gift and Gallery, which sells products made by local Brooklyn artisans, also got a loan from Seedco. Owner Jessica Furst got her check on Monday and "ran to the bank." She plans to use the cash to stock up on one of her best-selling items: pint glasses with illustrations of Brooklyn landmarks on them. They're a proven customer lure, drawing in tourists and others who make a special trip to Artez'n for the glasses.

With sales slow this year, Furst wouldn't have been able to afford to produce the Brooklyn beer glasses without the last-minute loan. "I would have been without them again, which would have been a loss of income for me, and possibly a loss of customer base," she said.

She will also use some of the loan money to fix the high-end printer she uses for her graphic design business. The small loan will make a big difference for Furst: "It will enable me to get back on my feet."

The big challenge for merchants will come over the next month. The National Retail Federation forecasts that this year's holiday sales will decline 1%, to $437.6 billion.

"The real concern is, can you sell stuff?" said Bill Dunkelberg, chief economist of the National Federation of Independent Businesses. "I am sure inventory accumulation has been cautious. It doesn't look like it is going to be much better than last year, which was terrible."

Squeezing by: Not every retailer is lucky enough to have a community lending program to turn to.

Clark Kepler's dad opened Kepler's Books in 1955. Like so many other independent bookstores, Kepler's Books is fighting for sales in an industry now dominated by Big Box discount retailers and Internet book sellers. Four years ago, with the shop on the brink of closure, 25 members of the Silicon Valley community voluntarily donated $1 million to save the neighborhood bookstore.

The recession has further ravaged the business, which saw a double-digit sales decline. "We had the most difficult time this last several months with the cash-flow issues," Kepler said. "We managed to get through it, but we were robbing Peter to pay Paul every step of the way."

One way the shop is coping is by churning inventory faster than it typically would. Bookstores can return unsold goods to publishers, and Kepler is shuffling fast to fine-tune his holiday lineup.

"It is a mad scramble much of the time," he said. "We have needed to scrutinize our inventory more and more to be sure that we have books that are selling." A book that languishes is "like money sitting on the shelf that we are not utilizing."

Kepler could use additional financing to give his bookstore more breathing room, but he's had little luck with the banks. He talked with one lender about a Small Business Administration-backed loan, but pulled out after deciding that the loan available for his shop wouldn't be big enough to justify all the effort involved in the application process.

Kevin Stein, co-owner of the Montana Fish Company in Bozeman, Mont., is also frustrated with the banks. "We have been to every bank in town," he said. "If we could expand into a bigger facility, we could take on more business, we could hire more people -- it is a win-win."

But so far, with no expansion loan yet available, Stein's seafood and wine market isn't doing its usual seasonal hiring. "We didn't lay anyone off, but it was a combination of not rehiring and not hiring for the holiday season," Stein said. To make up for the staffing decrease, Stein and his co-owner have upped their own hours.

"As employees filtered out, we just simply didn't rehire, which means I spent a lot less time at home," he said.

Like the merchants that borrowed from Seedco Financial, Stein is now looking outside the banking industry for help. He's trying to get a loan directly from the Small Business Administration, through its disaster lending program. A natural glass explosion one block away from Montana Fish may make the company eligible.

Stein and his business partner, Travis Byerly, have been pulling together mountains of documentation.

"It is a little mind-boggling," Stein said of application process. "But it is a great loan if we can get it. It could be a game changer."

Americans still bagging bargains and bulk buys Tennessee retailers link sales to charitable giving