First-time claimants to unemployment benefits rose by 455,000 from July 26 to Aug. 2, while the number of continued claimants – those regularly receiving federal unemployment relief – rose to 3.3 million, according to MarketWatch.

According to the Labor Department, the increase is an anomaly created by President Bush’s legislation which extended unemployment benefits to many who were previously left out.

The exact reason for the number of claimants is not as important as the number itself. All told, 3.3 million Americans are continually receiving federal unemployment relief, and nearly half a million individuals filed their initial jobless claim in the last week. According to Robert Schroeder of MarketWatch, initial claims totaling 350,000 signal a weakening economy and 400,000 initial claims signal recession. The four-week average of new claims here in the US stood at 419,500, well beyond the recession threshold.

This is not only a signal that the economy is in dire straights, but it is also a sign that something must be done about it. While unemployment relief is helpful and needed by the jobless, it is a drain on the federal budget and it is economically unproductive. The economy needs a jumpstart, and that must begin with job creation for Americans.

The current economic downturn is being felt not only by what remains of the manufacturing sector of the U.S. economy, but also in the service sector. For the second month in a row the industry has reported that business activity has contracted, according to CNNMoney.com.

The service sector is comprised of real estate, construction, mining, fishing, agriculture, health care, finance, insurance and administration.

Energy and commodity prices have increased for 62 consecutive months, which is taking its toll on businesses in the service industry. However, businesses are reluctant to pass the rising prices on to the consumers because industry insiders say that the American consumer is already strapped by the same set of circumstances.

Earlier this year, the Bush administration pushed its so-called “economic stimulus package” on to filing taxpayers in an effort to reinvigorate a stumbling economy. However, as July sales reports come to light it seems as if the stimuli have all but dried up, and the net effect has been negligible at best, according to Reuters.

Many major U.S. retailers posted sales for July which fell well short of projected gains, leaving many to worry about the prospects of the upcoming back-to-school shopping season.

The intent of the stimulus checks had been to grant a sustainable boost to the U.S. economy, but most individuals found their rebates being spent on gasoline, food and other commodities with soaring prices.

As the stimulus checks run their course we have seen little net result in macroeconomic terms. The only lasting effect may be the $100 billion added to this year’s federal budget deficit.

A documentary set to be released to theaters this month paints an even bleaker picture of the state of the U.S. economy than most Americans are aware of, according to the Washington Post.

Dubbed “The Inconvenient Truth” of the economy, the film claims that the $9.6 trillion in debt the country must currently contend with is actually somewhere closer to $53 trillion when all unfunded entitlement obligations are included, and those numbers are sure to worsen as more and more Baby Boomers retire and age.

The national debt currently accounts for 66 percent of gross national product, and if corrections are not made that number will climb to an astounding 244 percent by 2040, or double what it was at the end of WWII, when the U.S. was at its highest level of national debt.

These worse than advertised financial conditions leave the U.S. at risk of being held hostage by foreign lenders, because they are financing this nations social programs, public works projects and even our national defense. This accounts for nearly $300 billion a year borrowed from foreign sources, who could bankrupt the U.S. government overnight by electing to shed this debt.