WASHINGTON - December 24, 2008 - The United States has fallen deeper into recession, data showed on Wednesday, with the number of people filing unemployment claims reaching a 26-year high and consumers cutting spending for the fifth successive month.

Governments across the world have tried to boost expenditure to ease a recession ushered in by a credit crisis in the United States, with Japan and Germany becoming the two latest countries to unveil new spending programs.

Japan's government approved an 88.5 trillion yen ($980.6 billion) budget, its biggest-ever, to cover a 12 trillion yen fiscal stimulus program and Germany pegged its second spending package at 25 billion euros ($34.97 billion).

But some economists have said increased spending so far has failed to boost confidence among consumers, markets and investors.

In the United States, consumers cut spending for a fifth successive month during November and their incomes shrank, according to a Commerce Department report that pointed to deepening recessionary pressures.

It said spending contracted by 0.6 per cent after falling even more steeply by 1 per cent in October. Incomes contracted by 0.2 per cent after a slight 0.1 per cent gain in October.

New U.S. orders for long-lasting manufactured goods fell 1 per cent in November, a less severe drop than anticipated.

The number of U.S. workers filing new claims for jobless benefits jumped by 30,000 to a 26-year peak last week. Initial claims for state unemployment insurance benefits rose to a seasonally adjusted 586,000 in the week to Dec. 20 from a revised 556,000 the prior week, the Labor Department said.

Across the United States almost 2 million workers have lost jobs this year, driving the unemployment rate to 6.7 per cent.

Many leading companies are struggling to find ways to keep their businesses afloat, cutting jobs, work days or reducing benefits to counter weakening demand.

But for others, the crisis has become too powerful.

Zavvi, the CDs, DVDs, gaming and books retailer, became the third British high street victim of the crisis in less than 24 hours. Administrators Ernst & Young said they intended to trade the 114-store Zavvi UK with a view to selling all or part of the business as a going concern.

Shares in Europe weakened, with a weaker crude price hitting energy companies. U.S. stocks were headed for a flat open.

Under pressure to do more to boost the economy, Germany, Europe's biggest economy, plans to limit to 25 billion euros its second package of stimulus measures, a regional politician said.

The program's scope is less than the 40 billion euros previously reported for new projects.

The move is unlikely to ease pressure on Chancellor Angela Merkel who has been attacked by politicians and economists over the 31 billion euros-worth of measures already pushed through.

Further east, countries have also sought to stave off recession by cutting interest rates and spending their way out of trouble.

Poland's central bank said it was likely to cut rates further in 2009 because economic growth could be more than halved.

In Russia, a central bank source confirmed the ruble had been devalued for the seventh time in a month and a deputy interior minister said the country faced an increasing number of incidents of civil unrest due to the implementation of crisis measures.

“The situation may be exacerbated by a growth in protests, arising from the frustration of workers over the non-payment of wages or those threatened with dismissal,” RIA news agency quoted Deputy Minister Mikhail Sukhodolsky as saying.

Ukrainian Prime Minister Yulia Tymoshenko said the 2008 budget deficit may go uncovered due to a lack of funds. “The central bank has refused to refinance banks which had agreed to provide credits for the planned state budget deficit by the end of the year,” she told a news conference.

Japanese Prime Minister Taro Aso told a news conference, “Japan cannot avoid the tsunami of the world recession, but it can try to find a way out. The world economy is in a once-in-a-hundred-years recession. We need extraordinary measures to deal with an extraordinary situation.”