* Unemployment has surged. The unemployment rate zoomed to 5.4% in October -- the biggest one-month jump in more than two decades.

And the downward trend is shocking: payrolls dropped for the third month in a row -- falling 54,000 in August, 213,000 in September, and 415,000 in October. That trend certainly doesn't indicate an improvement.

The falling unemployment rate, plunging consumer spending, a continued recession in manufacturing, negative GDP, and falling corporate earnings are just some of the reasons why Economic Paralysis Sets In ...

http://www.safemoneyreport.com/home/daily.asp?archive=110101

* Gross Domestic Product is negative. The official definition of a recession is when the GDP is negative for two consecutive quarters. Well, the economy now has one foot in the grave.

And this recession could be more severe than anything we've seen since the Great Depression. We fully expect the next several years are going to be some of the most tumultuous in our economic history.

The US economy has taken its First Step to "Official" Recession ...

http://www.safemoneyreport.com/home/daily.asp?archive=103101

* Consumer confidence has cratered and consumers have slashed spending. Consumer confidence levels fell to a 7 1/2-year low -- in light of skyrocketing unemployment and the fear of more terrorist attacks.

Not surprisingly, consumer spending in the third quarter dropped to its weakest level in 8 1/2 years -- 1.2%. That's less than HALF the 2.5% increase in the second quarter.

Retailers desperately need consumers to open up their wallets, or else the holidays will be a disaster. If retail sales actually decline this holiday season, it will be the first time in almost 50 years -- since the end of the Korean War -- that Americans cut back on their Christmas spending.

And that seems very likely because consumer confidence is now More Like Consumer 'No Confidence' ...

http://www.safemoneyreport.com/home/daily.asp?archive=103001

* Corporate costs are increasing. Corporate America may have axed millions from its payrolls in an effort to cut costs, but employment costs have skyrocketed at the same time. This means that any extra money saved from eliminating a position is most likely going toward these extra costs -- not improving the company's profit margins.

The cost of worker benefits surged 1.6% in the third quarter. And, following the terrorist attacks, companies have had to pay for added security as well as higher insurance premiums.