WASHINGTON - Bad economic news just keeps piling up. Yesterday alone, three new milestones were reached: The number of workers filing unemployment claims hit an all-time high, sales of new homes reached an all-time low, and production of durable goods fell for the fifth straight month, boosting inventories to the highest level since the government began to keep count in 1992.
And it's not over. Today, when the Commerce Department releases its initial estimate of gross domestic product - that is, the value of all goods and services produced by the economy - for the fourth quarter of last year, it will essentially wrap into one, sobering number all the grim developments that have been accumulating in recent weeks and months.
Many economists think the decline will be a whopping 5 percent or more - which would make it the worst quarter for the U.S. economy since 1982.
"When we see fourth-quarter GDP ... it will be bad," said Nigel Gault, chief U.S. economist at IHSGlobal Insight, an economic forecasting firm in Lexington, Mass. "What today's numbers tell us is that first-quarter 2009 will be just as bad."
At the White House, President Barack Obama met again yesterday with his advisers - as he has almost daily since taking office 10 days ago- and pledged that his administration is working on a three-part plan to pull the economy out of the doldrums.
The three parts include the $819 billion package of spending and tax cuts under consideration in Congress, a plan to shore up the fragile financial system, and a program to address the housing and foreclosure crisis, which triggered the recession that began more than a year ago.
The stock market tumbled on the grim economic data, giving back nearly all of the gains it made the day before. The Dow Jones industrial average slumped 226.44 points, or 2.7 percent, to 8,149.01. The broader Standard & Poor's 500 index and Nasdaq composite index each gave up more than 3 percent. Financial stocks were the biggest losers.
On the jobs front, the Labor Dept. reported that the number of workers claiming unemployment benefits reached 4.78 million last week, an increase of 159,000 in just one week. In raw numbers, that's the highest level recorded since the government began keeping records in 1967.