That was the week that was

The number of people applying for unemployment benefits jumped last week to the highest level in three months. It's a sign that the job market remains depressed.

The Labor Department said Thursday that weekly applications rose by 11,000 to a seasonally adjusted 428,000. The week included the Labor Day holiday.

Applications typically drop during short work weeks. In this case, applications didn't drop as much as the department expected, so the seasonally adjusted value rose. A Labor spokesman said the total wasn't affected by Hurricane Irene.
Still, applications appear to be trending up. The four-week average, a less volatile measure, rose for the fourth straight week to 419,500.

Applications need to fall below 375,000 to indicate that hiring is increasing enough to lower the unemployment rate. They haven't been below that level since February.
The economy added zero net jobs in August, the worst showing since September 2010. The unemployment rate stayed at 9.1 percent for the second straight month.
The job figures were weak because companies hired fewer workers and not because they stepped up layoffs, economists said. Business and consumer confidence fell last month after a series of events renewed recession fears.

The government reported that the economy barely grew in the first half of the year. Lawmakers fought over raising the debt ceiling. Standard & Poor's downgraded long-term U.S. debt for the first time in history. Stocks tumbled — the Dow lost nearly 16 percent of its value from July 21 through Aug. 10.

Businesses added only 17,000 jobs in August, which was a sharp drop from 156,000 in July. Government cut 17,000 jobs. Combined, total net payrolls did not change.
Unemployment benefit applications are considered a measure of the pace of layoffs.
The total number of people receiving benefits dipped 12,000 to 3.73 million, the third straight decline. But that doesn't include about 3.4 million additional people receiving extended benefits under emergency programs put in place during the recession. All told, about 7.14 million people received benefits for the week ending Aug. 27, the latest data available.

More jobs are desperately needed to fuel faster economic growth. Higher employment leads to more income. That boosts consumer spending, which accounts for about 70 percent of economic growth.

Higher gas and food prices have cut into their buying power this year. The economy expanded at an annual rate of just 0.7 percent, the slowest growth since the recession officially ended two years ago.

Saxby Chambliss’ Gang of Six has grown to 38 U.S. senators from both parties, who on Thursday urged the debt reduction “supercommittee” to aim high and secure $4 trillion in budget savings.

The Georgia Republican was joined by Sen. Mark Warner, D-Va., and a group too large to fit on the news conference stage to send a message to the 12-member joint committee created in the summer’s deal to raise the debt ceiling. The committee must devise a plan by November to reduce future deficits by at least $1.2 trillion, on top of $917 billion in already agreed-upon savings. Chambliss and his gang want to nearly double that, as most budget experts say a $4 trillion course correction is necessary to lasso the nation’s rising debt.

“As you can see, our numbers have grown significantly,” Chambliss said. “We’re not only bipartisan, but we stretch on both sides of the spectrum in our respective caucuses. That’s how serious we know this debt is.”

Two separate but related Republican efforts are increasing the odds that the government will shut down at the end of September, despite repeated assurances from both GOP and Democratic leaders that neither party has an appetite for another round of brinksmanship.

In a Thursday letter, over 50 House Republicans, led by Rep. Jeff Flake (R-AZ), pushed Speaker John Boehner (R-OH) to make steep cuts to discretionary spending in the next fiscal year, reneging on the agreement the parties struck to resolve the debt limit standoff. That legislation set a cap on discretionary spending at $1.043 trillion and both Boehner and House Majority Leader Eric Cantor (R-VA) are committed to funding the government at that level for the coming year.

But many House conservatives want to go lower, and if they defect then House Democrats will have to pitch in to make sure it passes and avert a shut down.

It is important to recognize how fragile economic perceptions were headed into the final stretch of the debt-ceiling negotiation. Along with Hart Research [Associates], we have been doing economic tracking roughly every quarter from 2007 through today for CNBC. Workers’ perceptions of their likelihood to get a raise, Americans’ confidence in the stock market, and homeowners’ perceptions of their home value were as weak or weaker in June 2011 than they have been at any point during this four-year period.

Americans’ attitudes about the debt ceiling are not only based on the actual outcome but are primarily derived from the manner in which this issue was debated and resolved. Their views about this process are clear, and are overwhelmingly negative.” McInturff contends, “The perception of how Washington handled the debt-ceiling negotiation led to an immediate collapse of confidence in government and all the major players, including President Obama and Republicans in Congress.