News Update: Economy

This week brought some very interesting occurrences on both the national and the local levels as far as the economy and jobs are concerned.

One of the most obvious events that happened this week was the inauguration of President Obama on Tuesday. After his first speech declaring that the economy is going to be one of the top priorities, the president set forth the next day on his first executive orders including an order that begins with a freeze on all white house staffers earning more than $100,000.

Also in national economic news, Treasury-designate Timothy Geither apologized for not paying $34,000 in taxes earlier this decade at his confirmation hearing.

Former Federal Reserve chairman Paul Volcker introduced Geither during the hearing, and was also quoted as making several remarks about the future, stating that the government would have to rescue the whole system and ultimately the economy.

Volcker was directly quoted as saying, “To put it starkly, we are in a serious recession with no clear end in sight.”

He went on to say that several trillion dollars would need to be committed.
Though last week Obama’s Administration were granted the left over $358 billion left over from the leftover financial industy bailout funds, the plan as to what the money will be used on won’t be delivered for several weeks, Geither said on Wednesday.

The DOW rose 279.01 points (3.5 percent) on Wednesday after having fallen 332 the day before.

Private companies are suffering because of the economy as well, interestingly Microsoft which has decided to lay off 5,000 workers even though C.E.O Steven Ballmer was still looking into buying Yahoo’s search business to compete with Google.

“Even though we’re removing 5,000 jobs, we’re going to add a few thousand back into areas like search.”

Comerica Inc., which originated in Michigan before moving to Texas in 2007, announced Thursday that it will cut back 5% of its work force, about 570 of the banks 10,000 ranks. In Michigan, already 100 employees are already affected by layoffs, and this new decision will put hundreds more out of a job. The company is also not expected to open any new centers in Michigan for 2009 either.

This week also saw the release of Michigan’s unemployment numbers for December 2008, and they were not a very pleasant. The rate was the highest it’s been since 1984 the Department of Energy, labor, and Economic Growth reported at a staggering 10.6 percent, up from 9.6 percent in November 2008. This is well above the national level for December’s rate of 7.2 percent.

Even more depressing is the news that Michigan’s employment fell every month of 2008. It shouldn’t come as a surprise as Michigan has had the nation’s highest jobless rate for much of the past three years.

The worst affected area of Michigan is Mackinaw which has an unemployment rate of 19 percent. Worse than being unable to just pay for mortgages on homes, citizens are now having trouble paying other bills. People have complained about the Michigan Automated Response Voice Interactive Network (MARVIN) as being unreliable and not giving them the unemployment benefits they so desperately need to survive.

The national weekly average for unemployment is at $296.17 which varies by state with a standard length of payment in 26 weeks. However, last June, congress had extended the benefits for an additional 13 weeks.

However, in the $825 billion stimulus package that’s in congress would pump $2.6 billion into schools, roads, and bridges creating 158,000 jobs and give tax breaks to 3.5 million residents, an analysis reported Thursday.

The jobs created would keep unemployment at least 2.5 percentage points lower than it would without the stimulus.

Note: the contents of this post were assembled from several news sources.