WASHINGTON — The government deepened its support of the battered domestic automobile industry yesterday, providing auto lender GMAC Financial Services with $7.5 billion in additional aid to keep loans flowing to would-be buyers of GM and Chrysler vehicles.

"This new arrangement with GMAC will help provide a reliable source of financing to both auto dealers and customers seeking to buy cars," said Treasury Secretary Timothy Geithner. Strengthening GMAC will help stabilize the country's auto financing market, which should help the economy, he said.

It marked the second time the government has stepped in to shore up the mammoth Detroit-based lender, which received $5 billion in December from the Treasury.

UAW REACHES COST-CUTTING DEAL WITH GM, GOVERNMENT

DETROIT — The United Auto Workers struck a deal with General Motors and the federal government yesterday to cut labor costs, close factories and change the way retiree healthcare is funded.

The agreement could ease one of GM's biggest problems: The cost of its workforce. But the automaker is still struggling with a crushing debt that may drive it into a Chapter 11 bankruptcy reorganization.

The deal is "the best news for everybody involved," said Harlan Platt, a professor at Northeastern University in Boston who teaches corporate turnarounds.

REPORT SUGGESTS JOBS COULD BE SCARCE THROUGH 2010

WASHINGTON — A sign that jobs likely will remain scarce through next year emerged yesterday in a report showing a record number of Americans receiving unemployment aid.

And plant shutdowns by Chrysler LLC and General Motors Corp. could further harm the economy in coming months. Economists are just starting to assess the full impact of the auto industry's woes, which affect thousands of suppliers and dealers.

The number of people who are continuing to receive jobless benefits rose to nearly 6.7 million from about 6.6 million.