Oil has fallen below $50 per barrel on Thursday as the global contraction has gone deeper and fuel demand has waned, causing stocks and exchange traded funds (ETFs) to plummet.
The tattered financial markets have lowered confidence in the world economy and fuel demand has become stunted. Crude oil fell to $49.91 a barrel, the weakest level since January 2007, says Jad Mouawad for The New York Times. This has stripped oil of two-thirds of its value since the July record of $147.27, causing investors to pull their money out of riskier assets. The fall in oil has reflected some of the doubt riddling the equity markets.
United States Oil (USO) has lost 60.1% in the last six months.
Unemployment has also plummeted to a new 16-year high, according to the Labor Department. The anemic job market is projected to get weaker into next year. The Associated Press reports that the government said new applications for jobless benefits rose to a seasonally adjusted 542,000 from a downwardly revised figure of 515,000 in the previous week. Wall Street estimated 505,000.
The number of people continuing to claim unemployment insurance rose sharply for the third straight week to more than 4 million, the highest since December 1982, when the economy was in a painful recession. This bleak picture will cause economists to revise projections for unemployment rates this year, however, some of the figures reflect the growth within the labor force, about 50%, since the 1980s.
Octobers leading indicators are down, as jobless rates soar, stocks fall and building permits freeze. Consumer expectations are also low.
The New York-based Conference Board said its monthly forecast of economic activity declined 0.8% in October, worse than the 0.6% decrease expected by economists surveyed by Thomson Reuters, reports Ellen Simon for the Associated Press. In general, the indicators are pointing to a deteriorating economy, and the worst may not be behind us.
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