Money world

U.S. factory orders tumbled in August and the number of workers seeking jobless benefits rose in the latest week to a seven-year high as trauma in financial markets threatened to accelerate a deep downturn in the world’s largest economy.

Thursday’s reports were just the latest in a series of grim economic news, and follow Wednesday’s data showing factory activity shrank in September to its lowest level since the 2001 recession, according to the Institute for Supply Management.

“You add it all up, with the jobless claims and yesterday’s ISM, and it’s pretty damn clear we’re in a recession,” said Robert Macintosh, chief economist at Eaton Vance Corp in Boston.

The data heightened anxiety in financial markets, sending stocks sharply lower as investors feared the economy was increasingly vulnerable to the multiple blows this year from high energy prices and severe constraints on credit.

The number of people filing initial claims for jobless benefits was 497,000 in the week ended Saturday, the highest since the weeks following the September 11, 2001 attacks, the Labor Department said in a weekly report http://savingpaydayloans.com. Wall Street economists’ had forecasts 475,000 initial claims.

The Labor Department estimated that the effects of Hurricane Gustav in Louisiana and Hurricane Ike in Texas added approximately 45,000 claims to the total.

Even without that, claims would have been well above the level of 400,000 that many economists associate with a recession.

Weekly claims are one of the most up-to-date indicators, and the bad news is that even they probably do not fully reflect the effects of the heightened credit turmoil of recent weeks. 

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