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Job discrimination complaints hit record levels in fiscal 2008 nationwide, the U.S. Equal Employment Opportunity Commission reported.

There were 95,400 workplace discrimination claims filed for the year ended Sept. 30, the most recent data available. That’s up from 82,800 the previous year.

Complaints based on race, gender, age and religion all saw year-over-year gains.

Workers can file discrimination complaints with the commission, which can seek to remedy the situation including via lawsuits. Some of the complaints lead to financial settlements and mediation, while others are determined to have no merit.

Employment attorneys expected the increase as businesses cut back on hiring and increase layoffs because of the weak economy bad credit payday loans.

"It is no surprise that the number of charges have increased," said John Lomax, a labor and employment shareholder with the law firm Greenberg Traurig.

"During our annual labor seminar in October 2008, we projected that we would see an increase in the number of discrimination charges due to the fact that companies, for numerous reasons, would be forced to cut back in light of the current economic conditions; however, what is a bit surprising is the rate at which that number is increasing," Lomax said.

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Don’t have time to wait for a latte or a pot of drip to brew? Starbucks Corp. says it has an answer: Instant coffee.

The Seattle-based coffee retailer (NASDAQ: SBUX) plans to unveil an instant coffee product next week. In a memo sent to Starbucks employees Thursday, Vivek Varma, Starbucks senior vice president of public affairs, said the product could be in stores by Feb. 18.

Varma said this won’t be your father’s instant coffee. She said Starbucks has developed technology to “absolutely replicate the taste of Starbucks coffee in an instant form low cost payday loans.” Starbucks has been working on the project for 20 years, Varma said.

Varma said Starbucks was hosting an event next week in New York and other cities to introduce the new instant product.

Worldwide, there is a $17 billion market for instant coffee, according to the memo.

The new product was reported in Advertising Age, which said Starbucks planned to roll out a soluble coffee product called Via.

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The U.S. private sector cut more than half a million jobs in January, according to a report that indicates the labor market will continue hemorrhaging for another year.

ADP Employer Services said on Wednesday that private employers cut 522,000 jobs in January versus a revised 659,000 jobs lost in December. The December job cuts were originally reported at 693,000.

Though the rate of job losses slowed slightly, and was also less severe than analysts expected, there is more pain in store even if the government gets a plan in place to stimulate the moribund economy.

“It’s too late at this point to prevent a fairly significant further rise in the unemployment rate,” said Joel Prakken, chairman of Macroeconomic Advisers, which jointly developed the ADP report.

“And all that the stimulus can do is to limit how high the unemployment rate will go in this cycle.”

Prakken said he expected the unemployment rate to crest at more than 8 percent and “that would entail job losses of somewhere around 3 million, I would say, over the next 12 months.”

The U.S. unemployment rate jumped to 7.2 percent in December, the highest in 16 years, as a housing market crash, financial crisis and sharp decline in the auto industry led to widespread lay-offs cash advance.

The U.S. economy contracted at an annual rate of 3.8 percent during the last three months of 2008. Prakken said he expected “another large decline in output in the first quarter.”

In the ADP report, economists had expected 530,000 private sector job cuts in January, according to the median of 27 forecasts in a Reuters poll, which ranged widely from a drop of 720,000 to losses of 495,000.

U.S. stock index futures initially gained more ground after the data. U.S. government bonds, which usually benefit from weak economic data, pared their gains after the ADP report.

As of its December release, the ADP methodology was revised in an effort to align it more closely with the government’s non-farm payrolls report, which is due on Friday. The Labor Department report is expected to show 525,000 jobs were lost throughout the economy in January.

The ADP data series dates back to January 2001.

(Reporting by Burton Frierson; Editing by Tom Hals)

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Confidence among U.S. consumers unexpectedly dropped in December to a record low as Americans grew increasingly concerned about jobs, raising the risk that spending will keep weakening into the new year.

The Conference Board’s index of consumer confidence fell to 38, the lowest level since records began in 1967, from 44.7 in November, the New York-based private research group said today. Another report showed declines in property values accelerated.

Rising unemployment, mounting foreclosures and declining household wealth have dimmed the outlook for consumer spending, which accounts for 70 percent of the economy. This year’s holiday season, the most important for retailers, was probably the worst in at least four decades.

“The deterioration going on right now in the labor market made people feel much worse,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “If people are worried about their jobs, they are not going to spend. That is extremely negative.”

Economists surveyed by Bloomberg News forecast the confidence figure would increase to 45.5 from a previously reported 44.9 for November, according to the median of 52 projections. Estimates ranged from 40 to 51.1.

Earlier today, reports showed the decline in home prices accelerated in October as credit dried up and foreclosures mounted, and business activity in December contracted for a third month.

Home Prices Drop

The S&P/Case-Shiller home-price index of 20 U.S. metropolitan areas fell a record 18 percent in October from a year earlier, led by declines in Phoenix and Las Vegas. All 20 cities showed a decline in the year ended in October.

The Institute for Supply Management-Chicago said its business index climbed to 34.1 this month from a 26-year low of 33.8 in November. Readings less than 50 signal contraction.

Stocks trimmed gains following the reports and Treasury securities fell. The Standard & Poor’s 500 index rose 0.7 percent to 875.7 at 10:15 a.m.

The share of consumers who said jobs are plentiful fell to 6.2 percent, the lowest level in 16 years, from 8.7 percent last month, today’s report showed. The proportion of people who said jobs are hard to get increased to 42 percent from 37.1 percent.

Americans’ views about their financial well-being in future months deteriorated. The Conference Board’s gauge of the outlook for the next six months decreased to 43.8 from 46.2 in November payday cash advance.

The share of respondents expecting their incomes to rise over the next six months fell to 12.7 percent from 13.1 percent. Americans were more hopeful of finding jobs in the future.

The measure of present conditions dropped to 29.4 from 42.3.

‘Dismal’ Outlook

“The overall economic outlook remains quite dismal for the first half of 2009,” Lynn Franco, director of the Conference Board’s consumer survey, said in a statement.

The grimmer view on jobs swamped the effects of the drop in gasoline prices that helped other confidence measures climb this month. The Reuters/University of Michigan’s sentiment gauge rose from November’s 28-year low.

The average price of a gallon of regular gasoline dropped to $1.62 on Dec. 28, down 61 percent from July’s record.

Even so, the decline isn’t enough to undo the damage from the loss of 1.9 million jobs so far this year and the record destruction in household wealth caused by the slump in home and stock prices.

Economy to Shrink

Gross domestic product contracted at a 0.5 percent annual pace in the third quarter, the worst performance in seven years, the Commerce Department said last week. Economists surveyed by Bloomberg earlier this month projected the economy will contract at a 4.3 percent rate this quarter, hurt by another decline in consumer spending.

The jobless rate could reach 8.2 percent at the end of next year compared with last month’s 15-year high of 6.7 percent, according to the survey.

President-elect Barack Obama has expanded his economic stimulus goals and called for creating or saving 3 million jobs over the next two years. Vice President-elect Joe Biden said Dec. 23 the incoming administration and congressional leaders are nearing an agreement on the broad principles of a stimulus policy.

The International Council of Shopping Centers projects this was the worst holiday shopping season, the most important period for retailers, in at least four decades.

“It’s dismal,” Patrick Byrne, chief executive officer of Overstock.com, the Internet seller of discounted brand-name goods, said Dec. 24 in an interview on Bloomberg Television. “It seems the entire retail nation is running a going-out-of-business sale. It means the pricing is very competitive.”

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A gauge of the economy’s future performance posted its biggest annual drop since 1991 in November as the declines in housing and job markets accelerated, showing little sign the U.S. contraction will ease in early 2009.

The Conference Board’s index of leading indicators dropped 0.4 percent from October, and 3.7 percent from a year before. Other reports showed first-time claims for unemployment benefits held close to a 26-year high and manufacturing in the Philadelphia region contracted for the 11th time this year.

The drop in the leading index underscores economists’ projections that the recession will be the longest in the postwar era as banks restrict credit, home and stock values plunge and job losses mount. President-elect Barack Obama reiterated today that his top priority is a stimulus plan that spurs demand and creates new jobs.

“There is no end to the recession in sight,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who correctly forecast the decline in the leading index. “The economy is likely to continue to fall hard.”

Treasury securities maintained gains following the reports as concern over the deepening economic slump persuaded investors to accept almost record-low yields to safeguard their money. Yields on benchmark 10-year notes fell to 2.10 percent at 1:03 p.m. in New York. The dollar slid 0.9 percent to $1.4289 per euro. The Standard & Poor’s 500 Stock Index was little changed.

Jobless Claims

The number of Americans filing first-time applications for unemployment benefits dropped by 21,000 to 554,000 in the week that ended Dec. 13, from a 26-year high of 575,000 the prior week, the Labor Department said today.

“This is exactly the stage of the recession where businesses are aggressively cutting employment,” Mickey Levy, chief economist at Bank of America Corp. in New York, said in a Bloomberg Television interview. “I expect the pace of layoffs to continue.”

The Philadelphia Federal Reserve Bank’s manufacturing index registered a reading of minus 32.9 this month, higher than anticipated, compared with minus 39.3 in November. Negative readings signal contraction.

Economists projected the leading index would drop 0.4 percent, according to the median of 55 forecasts in a Bloomberg News survey. The measure has fallen in five of the past seven months.

Six of the 10 leading indicators subtracted from the index, led by a slump in building permits, plunging stock prices and increasing jobless claims.

Housing Rout

The drop in building permits to a record low last month subtracted almost a half point from the leading index.

The other negative categories included a decline in the factory work week, a drop in consumer expectations and shorter supplier delivery times that indicate a drop in orders.

A surge in the money supply adjusted for inflation, which has the biggest weighting in the index, prevented the gauge from falling even more cheap pay day loans. The measure added 0.6 percentage point.

The economy entered a recession in December 2007, the National Bureau of Economic Research announced Dec. 1. Economists surveyed by Bloomberg this month forecast continued contraction in the first half of 2009, making this the longest slump since the end of World War II.

The Conference Board’s index of coincident indicators, a gauge of current economic activity, fell 0.3 percent, after increasing 0.3 percent the prior month. The index tracks payrolls, incomes, sales and production, the figures used by the NBER to determine the start of recessions.

2007 Peak

The coincident index peaked in October 2007, two months ahead of the start of the downturn.

Obama may ask Congress next year to approve a stimulus plan of around $850 billion, according to a transition adviser. The amount would exceed initial estimates by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, as well as surpassing what some economists and the International Monetary Fund say is required.

Fed policy makers on Dec. 16 said they will target a federal funds rate of between zero and 0.25 percent and buy unlimited quantities of debt as the next step in combating the recession.

“The outlook for economic activity has weakened further,” the Fed said in a statement. The central bank said it “will employ all available tools” to revive growth and preserve price stability.

AutoNation Pain

Mike Jackson, chief executive officer of AutoNation Inc., the largest publicly traded U.S. car retailer, said sales have declined “practically to a standstill” because lenders are retrenching.

“The credit is simply not there from the financial institutions to finance those customers: they’re turning away very good customers,” Jackson said in a Bloomberg Radio interview on Dec. 4.

The Conference Board’s gauge of lagging indicators rose 0.1 percent after no change in the prior month. The index measures business lending, length of unemployment, service prices and ratios of labor costs, inventories and consumer credit.

The end of the recession won’t be signaled until the leading index and the ratio of coincident-to-lagging indicators turns positive for at least three months in a row, said Conference Board economist Ken Goldstein in an interview yesterday.

Still, “that would only mean the recession was losing steam, not that we were off and running,” Goldstein said, adding the data is unlikely to turn positive any “earlier” than the third quarter of next year.

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Sentiment among Japan’s largest manufacturers fell the most in 34 years, signaling companies are likely to cancel spending plans and cut more jobs, pushing the economy further into recession.

An index that measures confidence among large makers of cars and electronics dropped to minus 24 from minus 3, the Bank of Japan’s quarterly Tankan survey showed today. A negative number means pessimists outnumber optimists.

The yen’s surge to a 13-year high last week has compounded woes for Japanese manufacturers who are already reeling from a collapse in export markets. Job cuts by companies including Sony Corp. and Toyota Motor Corp. have brought the recession home to households and increased the risk of a prolonged slump.

“The overseas situation is worsening so quickly and so dramatically; it’s really getting dangerous,” said Tomoko Fujii, head of economics and strategy at Bank of America Corp. in Tokyo. “The next few months are going to be a very severe period.”

The drop in confidence, which was in line with economists’ expectations, didn’t dissuade investors from buying stocks on speculation U.S. authorities will help General Motors Corp. and Chrysler LLC avoid bankruptcy. The Nikkei 225 Stock Average climbed 4.7 percent in morning trading in Tokyo. The gauge is down 44 percent this year.

Bank of Japan Governor Masaaki Shirakawa and his colleagues will discuss the Tankan result at a policy meeting ending Dec. 19. The board will probably keep its benchmark interest rate at 0.3 percent at the gathering, according to all 11 economists surveyed by Bloomberg News.

Rate Cut ‘Option’

The bank lowered the rate for the first time in seven years in October, and another cut at some point “is an option,” former Deputy Governor Toshiro Muto said in an interview on Dec. 11. Still, he added, “with the interest rate already so low, a further reduction would have only a limited impact.”

The 21-point decline in the large-manufacturer index was the biggest since February 1975. In the current survey’s 34-year history, only a 26-point drop during the first oil shock in August 1974 was larger.

Sentiment among large non-manufacturers fell to minus 9 from 1, entering negative territory for the first time in five years, the central bank said. Large companies said they plan to cut spending 0.2 percent in the year ending March.

“The global financial crisis has caused serious damage to exporters but the repercussion effects are spreading,” said Takahide Kiuchi, chief economist at Nomura Securities Co. in Tokyo.

Gloomy Automakers

Sentiment among automakers plunged to minus 41 from 5, the steepest drop ever. Japanese carmakers have been hardest hit by the recession in the U.S., where consumer credit is drying up and household confidence is close to a record low advance payday loans.

Toyota, which forecasts profit will fall 74 percent this fiscal year, last month said it will halve its temporary work force to 3,000 employees. The company is considering production and investment cuts in India, Brazil, China and the U.S.

The yen’s 17 percent gain against the dollar since September has lowered the value of overseas sales and undermined the competitiveness of Japanese cars, cameras and televisions.

Japan’s currency traded at 90.95 per dollar from 90.68 before the Tankan was published and 88.53 on Dec. 12, the strongest since August 1995. Large manufacturers expect the yen to trade at 103.32 in the year ending March, the survey showed.

The world’s second-largest economy shrank in each of the past two quarters, entering the first recession since 2001. Companies will keep trimming production and payrolls in coming months, prolonging the downturn, said Bank of America’s Fujii.

Too Many Workers

“The recession is likely to persist through the first half of next year,” Fujii said. “We have tighter lending conditions, excess capacity, excess labor — these all point to downside risks in the pipeline.”

The capacity index for large manufacturers climbed to 11 points from 2, the highest since March 2004. A measure of labor demand rose to a four-year high of 8 from minus 2, the first time companies said they had too many workers since 2005.

Sony last week said it would fire 16,000 employees worldwide, including 8,000 full-time staff. Canon Inc., Sharp Corp. and Nissan Motor Co. eliminated temporary and part-time positions over the past month, pushing consumer sentiment to a record low and stoking anxiety among voters.

Prime Minister Taro Aso, facing tumbling approval ratings, last week announced his second economic stimulus package since becoming leader in September. Aso still hasn’t submitted a bill to parliament to fund measures announced in October.

LDP Rift

The ruling Liberal Democratic Party may split apart before elections required by September 2009 because lawmakers don’t believe victory is possible under Aso, independent lower-house member Kenji Eda said last week.

Big companies expect business to get worse in coming months. Large manufacturers see their index falling to minus 36 in the next survey in April, and service companies expect a drop to minus 14 points.

Some economists downplayed the result.

“These forward-looking indicators have a rather poor track record when it comes to predictions,” said Jan Lambregts, head of Asian research at Rabobank International in Hong Kong. “It could have been a whole lot worse.”

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Timothy Geithner, President-elect Barack Obama's choice for U.S. Treasury Secretary, is seeking to push Federal Deposit Insurance Corp. Chairman Sheila Bair out of office.

Geithner, president of the Federal Reserve Bank of New York, has argued Bair isn't a team player and is too focused on protecting her agency rather than the financial system as a whole, according to two congressional officials and a person familiar with his thinking. Bair has battled with Geithner and fellow regulators over aid to Citigroup Inc. and other emergency actions, making her enemies in the Bush administration.

“The idea of having an independent actor on the stage with you who might not be singing the same tune can make you nervous,” said Wayne Abernathy, a former Treasury official who is now executive vice president with the American Bankers Association in Washington. “They recognize that she's a very independent person.”

It isn't clear that Obama would ask Bair to step down. Such a move would be fraught with political risk for the new administration, especially on Capitol Hill, where Bair's campaign to rework mortgages for struggling homeowners has won respect from top lawmakers, including Senate Banking Committee Chairman Christopher Dodd and Barney Frank, his counterpart in the House.

Bair's spokesman Andrew Gray declined to comment. Obama's transition spokeswoman Stephanie Cutter had no immediate comment.

Obama Plan

Even if Bair remains at the FDIC, the Obama economic team has decided that she won't play a central role in policy, the people said. While Bair, like Obama, has favored aid for Main Street as well as Wall Street, the new administration will have its own plan to help the millions of people facing eviction from their homes. It will also have its own team to run the government's $700 billion bailout program, they added.

Pushing out the head of the FDIC, which oversees more than 5,000 banks and savings institutions, would clash with the pledges made by Obama's own transition team. Bair has become the most prominent Republican regulator, and the incoming administration has promised to give Republicans important jobs.

“You'll see Republicans again, in his administration, not just a token member in the Cabinet, but you'll see them spread throughout the administration,” transition director John Podesta said in an interview with Bloomberg Television last week.

Frank Proposal

Bair, who was appointed by President George W. Bush to a term as chairman that ends in 2011, has been lobbying behind the scenes for a stepped-up role in the Obama administration. Frank, a Massachusetts Democrat, has suggested that she be named to a special post to oversee government-wide programs to stop foreclosures.

Bair “brings a lot of credibility” on crafting ideas to ease the mortgage crisis, said Kevin Petrasic, a former Office of Thrift Supervision official who now works at law firm Paul, Hastings, Janofsky & Walker in Washington.

In public comments, Bair, 54, has indicated she'd like to stay on, while she'd be prepared to depart if Obama wants someone else to take the helm at the FDIC.

She said at a press conference in Washington Nov. 25 she'd work “in whatever role they want me in this institution to play.” The month before, Bair said in an interview on “Political Capital with Al Hunt” on Bloomberg Television that “I'm happy to go back to academia too. So I want to be flexible for the next president.”

Protecting Fund

Geithner became increasingly wary of Bair as she worked with the other regulatory agencies on emergency bailouts of banks in recent months fast cash advance. The New York fed chief has been concerned that Bair was more worried about keeping the FDIC's insurance program protected than she was about the entire financial system, one person said.

Bair twice sparred with her colleagues at the Fed and Treasury over efforts involving Citigroup. In October, she acquiesced to Wachovia Corp.'s agreement to a takeover by Wells Fargo & Co. days after agreeing to back an initial deal with Citigroup. Geithner was concerned that allowing the Citigroup transaction to fail would inhibit other lenders from working with the FDIC on any subsequent rescues, the people said.

Wells Fargo offered about $15 billion for Wachovia, compared with Citigroup's $2.2 billion deal to acquire Wachovia's banking operations, and didn't need any FDIC aid.

Citigroup Crisis

Citigroup's position weakened, with its shares losing as much as 65 percent after the failed Wachovia deal amid a collapse in investor confidence — precipitating another rescue attempt.

Again, Bair held out for concessions as the Fed and Treasury sought to shield Citigroup from losses in its holdings of toxic assets. Bair insisted on getting preferred shares for the FDIC in the New York-based bank. She also demanded that Citigroup agree to implement mortgage modifications according to a model developed by her agency.

At one point during a Nov. 23 Fed board meeting about the Citigroup rescue, Chairman Ben S. Bernanke stepped out to take a call from Treasury Secretary Henry Paulson. Returning a few moments later, Bernanke told his colleagues that the secretary was still locked in negotiations with Bair, whose demands were delaying the deal.

The political peril of ousting a popular regulator who has sided with struggling homeowners and sought tougher conditions on financial firms could fuel charges that Geithner and other Obama appointees are too closely connected to Wall Street.

'Willing to Stand Up'

“I don't think you want an FDIC chairman who isn't willing to stand up,” former FDIC Chairman William Isaac, who is now head of Secura Group LLC in Falls Church, Virginia, said in an interview.

On other issues, too, Bair has stepped out in front of her Bush administration colleagues.

As the mortgage bust deepened, Bair repeatedly pushed Fed and Treasury officials to boost aid for homeowners.

In 2007, Bair told lawmakers the Fed should use its authority over home-loan standards to tighten oversight and crack down on the practices that contributed to the subprime mortgage mess.

This year, Bair has proposed using taxpayer funds to help refinance loans for struggling homeowners. She told legislators at an Oct. 23 hearing that the Treasury could use its $700 billion financial-rescue fund to set terms for mortgage modifications and offer guarantees for loans that meet the standards.

Senators pressed Neel Kashkari, the Treasury official overseeing the Troubled Asset Relief Program, on his department's reaction. “We are looking very hard” on the proposal, he said.

The White House later that month sought to scale back Bair's idea to use as much as $50 billion from the program. Yesterday, an official said Paulson instead is considering a proposal to drive down home-loan rates through purchases of mortgage-backed securities.

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President-elect Barack Obama warned that the U.S. is “trapped in a vicious cycle” and faces the loss of “millions of jobs” unless immediate steps are taken to stimulate the economy and to rescue the nation’s automakers.

“If we do not act swiftly and act boldly, most experts now believe we could lose millions of jobs next year,” Obama said at a press conference today in Chicago. “We do not have a minute to waste.”

Obama, 47, said he will nominate New York Federal Reserve Bank President Timothy Geithner as Treasury secretary and has picked former Treasury chief Lawrence Summers to be his White House economic director. Obama also named Christina Romer to head the Council of Economic Advisers, and Melody Barnes to serve as director of the Domestic Policy Council.

“We need to bring together the best minds in America to guide us, and that is what I’ve sought to do in assembling my economic team,” he said.

The president-elect vowed to push for a large economic- stimulus package, though he declined to say how big it would be, saying only that the spending needs to be “of a size and scope that is necessary to get this economy back on track.”

“We have to make sure the stimulus is significant enough that it really gives a jolt to the economy,” he said, adding that it will focus on creating jobs and restoring business confidence.

$700 Billion Plan

Democratic lawmakers including Senator Charles Schumer of New York said this weekend they plan to design a package as large as $700 billion and deliver it to Obama on his first day in office.

Obama said any economic-recovery plan should also address clean energy and education. “Not only do I want this stimulus package to deal with the immediate crisis, I want it also to lay the groundwork for long-term, sustained economic growth.”

He conceded that any plan is “going to be costly” and lead to a substantial budget deficit.

Obama also pledged to aid American automakers in avoiding a cash shortage and possible bankruptcies, saying, “We can’t allow the auto industry simply to vanish.”

Still, he said, the Big Three automakers must present a plan on how they will overhaul their operations to become more competitive with foreign automakers, and take into account environmental and energy concerns.

Help for Automakers

“We should help the auto industry, but what we should expect is that any additional money that we put into the auto industry, any help that we provide is designed to assure a long- term sustainable auto industry and not just kicking the can down the road,” he said business cards.

U.S. automakers have been lobbying Congress for $25 billion in aid to stave off a cash shortage by year-end. Lawmakers have put off until December a vote on a bailout, telling the carmakers to submit plans to reform themselves by Dec. 2.

“Americans take great pride in the history of the American automobile industry, but taxpayers don’t want to see more money wasted,” Obama said.

Obama said he plans to follow through on campaign promises to pass a tax cut for most Americans and to raise taxes on the wealthiest, saying they can afford to “pay a little bit more for us to be able to invest and get the economy back on track.”

Talks With Bush

Obama said he spoke to both President George W. Bush and Federal Reserve Chairman Ben Bernanke today about the $700 billion financial market rescue plan, and that they “are united in making sure that the financial system works and operates the way it needs to.”

“We have to do whatever is required to keep the financial system working and capital flowing,” he said. The Treasury and Fed need to use their authority under the legislation to “forcefully” resolve the crisis created by banks burdened with deteriorating assets related to subprime mortgages. He said the government rescue of Citigroup Inc. announced over the weekend highlighted the magnitude of the challenge facing the nation and his administration.

“Our economy is trapped in a vicious cycle,” he said. “The turmoil on Wall Street means a new round of belt- tightening for families and businesses on Main Street, and as folks produce less and consume less, that just deepens the problems in our financial markets.”

Balancing Tax Code

He didn’t specify whether he wanted Bush’s tax cuts to be repealed or to let them expire in 2010, as scheduled.

“We’ve got to restore some balance to our tax code,” Obama said. “Whether that’s done through repeal or whether that’s done because the Bush tax cuts are not renewed is something that my economic team will be providing me a recommendation on.”

Obama warned against expectations of “shortcuts or quick fixes” to the crisis. “The economy is likely to get worse before it gets better,” he said.

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Wall Street’s Friday sell-off was not as bad as some had feared, with the Dow Jones Industrial Average working off a good part of its 500 point morning loss.

By the closing bell, the Dow was still down 312 points, a 3.6 percent Friday loss, closing at 8379. For the week, the Dow fell 5.4 percent. The S&P500 Index lost 7 percent in weeklong trading, while the Nasdaq Composite Index fell 9 percent this week.

Friday’s selloff followed even steeper one day losses for major markets in Asia and in Europe free credit report without a credit card. In London, the FTSE100 Index fell 5 percent Friday. Tokyo’s Nikkei 225 fell 9.6 percent Friday.

The S&P500 Index is now down just over 40 percent this year.

Commodity prices also continued to fall, with crude oil futures in New York dropping below $65 a barrel.

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China's economy, the biggest contributor to global growth, expanded at the slowest pace in five years as the financial crisis cut demand for exports.

Gross domestic product rose 9 percent in the third quarter from a year earlier, the statistics bureau said in Beijing today. That was less than any of the 12 estimates in a Bloomberg News survey and the 10.1 percent gain in the previous three months.

The fifth quarter of slowing growth may exacerbate declines this year in iron ore, copper and oil prices and undermine demand for exports within Asia, where economies are already contracting. The cabinet announced yesterday tax cuts for exporters and increased infrastructure investment and the central bank may be poised to cut interest rates for the third time this year.

“This will shake confidence and underscores that no one is immune,'' said Ben Simpfendorfer, an economist with Royal Bank of Scotland Plc in Hong Kong. He predicts three more rate cuts by the middle of next year and a further easing of lending restrictions.

Inflation cooled to 4.6 percent in September, the slowest pace since June 2007, on easing commodity prices.

The CSI 300 Index of stocks fell 0.3 percent as of the 11:30 a.m. trading break in Shanghai. The yuan traded at 6.8295 against the dollar as of 11:44 a.m. from 6.8296 before the data was released.

Spreading Crisis

The economists' median estimate was for a 9.7 percent expansion. Growth is slowing across Asia, where Japan's economy shrank in the second quarter and Singapore has tumbled into a recession.

Financial market turmoil and a global slowdown “have started to have a negative impact on China's economy,'' Li Xiaochao, a statistics bureau spokesman, said at a briefing. “The subprime crisis that broke out last year in the U.S. is still spreading and deepening and has caused a global financial crisis.''

China's economic expansion was the weakest since the second quarter of 2003, when growth slumped because of the severe acute respiratory syndrome, or SARS, epidemic.

The contribution of trade to growth halved to 1.2 percentage points in the first nine months from a year earlier, the statistics bureau said. Export growth may slow “substantially,'' Li said.

Investment, Output

Urban fixed-asset investment climbed 27.6 percent in the first nine months from a year earlier, after a 27.4 percent increase through August, today's data showed.

Industrial production rose 11.4 percent in September, the slowest pace in more than six years excluding seasonal distortions, on weaker export orders and factory closures for the Olympic Games.

Retail sales rose 23.2 percent last month from a year earlier, matching the gain in August and close to the fastest pace in at least nine years.

Urban disposable incomes for the first nine months rose 14.7 percent to 11,865 yuan ($1,737) from a year earlier. Rural cash incomes climbed 19.6 percent to 3,971 yuan. Those numbers were boosted by inflation.

The State Council yesterday cited slower growth in fiscal revenue and company profits and “volatility and sluggishness'' in stocks as signs of the effects of the global crisis no qualifying payday advance.

Demand for Steel

Rio Tinto Group, the world's second-largest aluminum producer, last week flagged “significantly weaker'' demand for the metal in China. Prices for Chinese imports of iron ore also fell to a 19-month low on cooling demand from steelmakers.

About half of China's toymakers have shut down this year, with 7,000 workers losing their jobs in factory closures this month by Smart Union Group Holdings Ltd. in Guangdong province, state media say.

Export growth may plummet from 22 percent in the first nine months of this year to “zero or even negative growth'' in 2009, according to Stephen Green, head of China research at Standard Chartered Bank Plc in Shanghai.

The central bank has stalled gains by the yuan against the dollar since mid-July, protecting jobs in export industries.

Weakness in the property market is also a threat. Home sales by volume plunged 55.5 percent and 38.5 percent in Beijing and Shanghai in the first eight months from a year earlier, the official Xinhua News Agency reported, citing the China Real Estate Association.

The State Council said yesterday that it would increase the supply of low-cost housing and reduce property transaction fees.

Slumping Stocks

The CSI 300 Index of stocks has fallen 66 percent this year.

“The panic in the stock market has spread to the property market,'' said Sherman Chan, a Sydney-based economist at Moody's Economy.com. “Declines in asset prices make people feel less wealthy and they will cut back on consumption and then investment growth will slow.''

A fiscal surplus and a world record $1.9 trillion of currency reserves allow the government to step up spending.

The International Monetary Fund estimated this month that China's economy may expand 9.3 percent next year compared with growth of 0.1 percent in the U.S., 0.2 percent in the euro area, and 0.5 percent in Japan. China was the biggest contributor to global growth last year, according to the organization.

“In the past China has been successful in responding quite quickly to increase spending, particularly on infrastructure, to offset the decline in export growth,'' Charles Collyns, the IMF's deputy director of research, said Oct. 8.

Easing inflation cleared the way for two interest-rate reductions in a month, the latest on Oct. 8, when the U.S. Federal Reserve and five other central banks also made cuts in an emergency bid to thaw credit markets.

The nation needs “flexible and prudent'' economic policies to promote steady and rapid growth, the statistics bureau's Li said.

Producer prices rose 9.1 percent last month after the 10.1 percent gain in August that was the biggest since 1996.

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