U.S. falls deeper into recession

By Steven C. Johnson

NEW YORK (Reuters) - The United States fell deeper into recession, data showed on Wednesday, as the number of people filing for jobless benefits hit a 26-year high last week and consumers cut spending for the fifth consecutive month.

Elsewhere, Japan and Germany became the latest countries to approve new spending programs to jolt their own economies out of recessions brought on by the worsening global credit crisis.

In Tokyo, the government approved an 88.5 trillion yen (£663.3 billion) budget, its biggest ever, to help finance a 12 trillion yen fiscal stimulus program.

Germany announced plans for a second stimulus package, to be capped at $25 billion euros (£23.7 billion), to help Europe's biggest economy weather a growing recession.

So far, however, increased spending in economies around the world has yet to boost confidence among businesses, investors or consumers.

Data on Wednesday showed U.S. consumers cut spending in November as their incomes shrank, pointing to a prolonged recession for the world's largest economy.

New orders for long-lasting manufactured goods fell 1 percent in November, following a steeply revised plunge of more than 8 percent the prior month, while the number of U.S. workers filing for jobless benefits for the first time soared by 30,000 to a 26-year peak in the week ended December 20.

Nearly 2 million U.S. workers have lost jobs this year, driving the unemployment rate to 6.7 percent.