Figures just released showed that new claims for jobless benefits jumped to a 16 year high this month.

This news comes the day after the Federal Reserve released minutes from last month's closed meeting revealing their grim assessment that "significant weakness" in the economy will continue, and unemployment could rise to 7.6 percent.

Combined with the dimmed prospects for an auto industry bailout, stocks plunged on Wednedsay, closing below 8000 for the first time in five years.

Moody's Economy.com chief economist Mark Zandi asserts, "I think it's extremely urgent for the government to do more. They've now recapitalized much of the banking system. There's still a lot of money left and that money really needs to be deployed."

The White House, which initially opposed extending jobless benefits, has made a political u-turn. White House spokesperson Dana Perino announced, "Because of the tight job market, the president believes it would be appropriate to further extend unemployment benefits, and he would sign the legislation now pending in Congress."

But the economic outlook offers little hope for the millions of unemployed Americans. And despite very low prices, Americans aren't willing to spend as much this holiday season as last year, which could drive many struggling retailers out of business by January.

The Senate expects today to take up a measure to extend unemployment benefits.