Robert Barber, a Vietnam veteran from Bronx, N.Y., talks with a recruiter at the New York State Labor Department job fair for veterans last week in New York. - AP

Jobless explosion

WASHINGTON — Jarred by new jobless alarms, Congress raced to approve legislation Thursday to keep unemployment checks flowing through the December holidays and into the new year for a million or more laid-off Americans whose benefits are running out.

The economic picture was only getting worse, if Wall Street was any indication. The Dow Jones industrials dropped more than 400 points for a second-straight day, reaching the lowest level in more than five years, and the Standard & Poor's 500 index fell below lows established six years ago.

The Senate's vote followed Thursday's government report that laid-off workers' new claims for jobless aid had reached a 16-year high and the number of Americans searching for work had surged past 10 million.

The White House, which had opposed broader legislation containing the benefits extension, urged passage of the new version and said President George W. Bush would quickly sign it.

As Congress prepared to leave town — perhaps for the year — there was no such resolution on helping the auto industry, a disaster in the making that could lead to hundreds of thousands if not millions of additional lost jobs. Democratic leaders said they could return to Washington in mid-December to vote on rescue loans if the carmakers first present a plan on transforming and modernizing their operations.

Discouraged by the stalemate over auto aid, investors sent the Dow Jones industrials down to another big loss, 445 points.

As for the jobless benefits, about 1.2 million people would exhaust their unemployment insurance by the end of the year without the extension, sponsors said. The measure is estimated to cost about $5.7 billion, although economists put the positive impact at $1.64 for every dollar spent on jobless benefits because the money helps sustain other jobs and restores consumer confidence.

"Putting money in the hands of unemployed families means they will be able to pay their rent and utility bills, buy groceries and clothe their children," Sen. Dick Durbin, D-Ill., said after the voice vote in the Senate. "It is money that will create economic growth in America."

The House had approved the bill in October.

In yet another bad sign for the economy's near future, the private, New York-based Conference Board said Thursday that its monthly forecast of economic activity declined 0.8 percent in October. Over the past seven months, the index has declined at a 4.7 percent annual rate, faster than at any other time since 2001.

Most of the decline was due to the drop in stock prices, a decline building permits and sagging consumer expectations.

Share This Story