Thursday, October 18, 2007

Dollar Hits New Low as Unemployment Claims Spike Upward

The euro reaches $1.4305 after U.S. jobless claims spike.
The dollar fell to a new record low against the euro on Thursday, with the 13-nation European currency breaking through the $1.43 mark for the first time after Washington reported a spike in jobless claims.

The euro rose to $1.4305 in early afternoon trading in Europe shortly after the U.S. Labor Department reported that applications for jobless benefits hit 337,000 last week - up 28,000 from the week before and the biggest one-week surge since claims jumped 42,000 the week of Feb. 10.

It settled back slightly, to $1.4290, but was still up more than a penny from the $1.4186 it bought in late New York trading on Wednesday and was higher than the previous record of $1.4282 set Oct. 1.

The jobless increase was four times the gain of 6,000 that economists had been expecting and was taken as a possible sign that the labor market is starting to weaken under the impact of a housing downturn and turmoil in credit markets.

Earlier this week, both Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke warned that the housing crisis was likely to last longer than had been expected.
Of course the housing crisis will last longer. Who exactly will buy all these homes after foreclosure? Real wages are down for six years under this administration and the savings rate is negative for the first time since the great depression. With new underwriting standards on loans less people will qualify. This all adds up to a disaster in the making.

This is what happens when you kill the middle class.

No comments: