NEW JOBLESS CLAIMS.  New government data shows that the number of U.S. workers filing new claims for jobless benefits rose by a “higher than expected” 27,000 last week to their highest level in 16 years. According to Reuters, “initial claims for state unemployment insurance benefits were a seasonally adjusted 542,000 in the week ended Nov. 15 from a revised 515,000 the previous week.” 

ECONOMY. Today’s Los Angeles Times reports that “the Federal Reserve warned that a recession believed already to be underway could last until mid-2009 or later. That's likely to mean interest rates will be cut again soon, the central bank indicated.” The paper notes that this news “along with other economic concerns including the fate of Detroit's ailing carmakers, sent Wall Street into another panic. The Dow Jones industrial average tumbled 427 points, or 5.1%, closing below the 8,000 mark for the first time since early 2003.” Additionally, “the Labor Department reported that consumer prices fell a record 1% last month from September's level, bringing the inflation rate for the last 12 months to a relatively modest 3.7%.”

The New York Times says, "While most consumers might welcome the idea that things are getting cheaper, deflation is an economists' nightmare. It was a hallmark of the Depression and Japan's so-called lost decade in the 1990s." The Wall Street Journal reports that the odds of deflation "are still considered small by most economists. But the mere risk puts added pressure on Congress and the incoming Obama administration to quickly advance a large fiscal stimulus plan."

AUTO INDUSTRY. The Politico’s David Rogers reports that “a year-end drive to win new aid for the ailing auto industry is all but dead in Congress, pulled down by old resentments toward Detroit’s Big Three and continued fighting between Democrats and the outgoing Bush administration.” And while “Midwestern senators “vowed to make a last push to craft a compromise $25 billion loan package to be administered by the Commerce Department and financed in a manner acceptable to the White House,” CongressDaily indicates that “there is no indication the plan would pass muster with House and Senate Democratic leaders and have a chance to get through in the lame-duck session.” The Hill notes that White House press secretary Dana Perino told reporters “that the administration was ‘extremely concerned’ that Sen. Reid would not allow a vote on the Midwestern senators’ compromise, “and said if lawmakers leave without helping the industry, Democrats would clearly be responsible.”

Meanwhile, Roll Call reports that Majority Leader Harry Reid (D-NV) “said the Senate will likely leave town for the month later today when it completes action on an unemployment insurance bill but may have to return in December.” The paper notes that “Reid did not mention what items would be on the agenda next month, but the top Senate Democrat has been working all week to push through a loan for the ailing automotive industry.”

IRAN. Today’s New York Times reports that according to nuclear experts, “Iran has now produced roughly enough nuclear material to make, with added purification, a single atom bomb.” A new IAEA report says that as of earlier this month,” Iran had made 630 kilograms, or about 1,390 pounds, of low-enriched uranium.” Experts say “that was enough for a bomb, but they cautioned that the milestone was mostly symbolic, because Iran would have to take additional steps. Not only would it have to breach its international agreements and kick out the inspectors, but it would also have to further purify the fuel and put it into a warhead design — a technical advance that Western experts are unsure Iran has yet achieved.” The paper notes that “the report underscores the magnitude of the problem that he will inherit Jan. 20: an Iranian nuclear program that has not only solved many technical problems of uranium enrichment, but that can also now credibly claim to possess enough material to make a weapon if negotiations with Europe and the United States break down.”

DINGELL-WAXMAN. In its lead story, Roll Call reports that “the bitter fight for control of the Energy and Commerce Committee enters its final day with the teams of both Chairman John Dingell (D-MI) and second-ranking Rep. Henry Waxman (D-CA) predicting victory, but with the outcome far from clear.” Yesterday, Waxman narrowly secured the nomination of the Democratic Steering and Policy Committee, which means his name will be submitted to lawmakers first at this morning’s caucus meeting. After that, “a Dingell supporter will have to stand to nominate the incumbent chairman.” Chairman Dingell got a “big boost” yesterday from Majority Leader Steny Hoyer, who spoke on his behalf at the Steering meeting. Sources say “Hoyer expressed concern at the precedent that would be set by removing Dingell, whom he described as a loyal House Democrat and able legislator.”

MN SENATE. The Minneapolis Star Tribune reports Sen. Norm Coleman's (R) lead in the Minnesota Senate race narrowed slightly Wednesday as the recount of approximately 2.9 million ballots began. With "about 18 percent of the vote recounted, Coleman continued to lead Franken – but by only 174 votes, notably narrower than the unofficial gap of 215 votes at which the recount had begun."

MISSOURI. The Politico reports that the state of Missouri and its 11 electoral votes have been called for Sen. John McCain after he won the state by about 3,632 votes. The final electoral vote tally: Obama 365, McCain 173. USA Today says "it is the first time a Democratic candidate won the presidency without Missouri," and that the McCain win breaks Missouri's "bellwether" trend of always backing the winning candidate since 1956.

SEN. KERRY. Today’s Boston Globe reports that “more than three decades after he first appeared before the panel as a 27-year-old Vietnam veteran-turned-antiwar protester, Senator John F. Kerry will be named chairman of the Senate Foreign Relations Committee, giving him enormous influence over President-elect Barack Obama's foreign policy.”

TRANSITION. According to the Obama-Biden transition team, the President-elect will hold private meetings in Chicago with no public events scheduled. Today is the Vice President-elect’s birthday, and he will spend it in Delaware with no public events scheduled. Meanwhile, “Chief of Staff Rahm Emanuel will hold meetings on the Hill with House and Senate Republican leaders to discuss how to best work together and ensure they know that the White House will be open at all times for them.”

HOMELAND SECURITY. The Washington Post reports that Arizona Gov. Janet Napolitano, "a border-state governor whose handling of immigration and homeland security issues brought her accolades from fellow governors, is President-Elect Obama's choice to serve as secretary of homeland security, Democratic sources said late Wednesday."

COMMERCE. The Los Angeles Times reports that according to multiple sources, “Penny Pritzker is the top choice of president-elect Barack Obama to become his Secretary of Commerce." The "49-year-old billionaire was national finance chair of Obama's record-breaking presidential campaign that raised in the neighborhood of $640 million."