Jobless Claims Rise Unexpectedly
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Thursday, August 13, 2009; 11:39 AM
The number of people filing for unemployment last week rose slightly more than expected to 558,000, another reminder that despite other indications of improvement in the economy, the job market remains weak.
First-time claims increased 4,000 compared with the previous week, while the four-week moving average, which smooths out week-to-week volatility, rose by 8,500 to 565,000, the Labor Department reported Thursday. That is still below what it was 18 weeks ago and suggests that initial jobless claims have peaked.
Federal Reserve leaders on Wednesday gave an upbeat assessment of the economy, saying "economic activity was leveling out." And they left a key interest rate they control close to zero.
Analysts noted, however, that initial claims will likely have to fall below 400,000 before the economy stops shedding jobs. More than 14 million Americans are out of work, and data issued this week by the Labor Department showed there are six unemployed people for every job opening.
The jobs report for July, which came out last week, showed that businesses cut fewer jobs in July and that the nation's unemployment rate dipped to 9.4 percent. But most economists are predicting unemployment will rise to 10 percent by year's end.
Employers are still cutting jobs as they struggle to bring production in line with falling demand.
A separate report released by the Commerce Department on Thursday showed businesses slashed inventories at a faster-than-expected pace of 1.1 percent in June, due in part to an increase in auto sales. Auto sales are expected to keep rising as a result of the "Cash for Clunkers" program.
Consumers, however, have not resumed their pre-recession spending habits. Mounting job losses continue to put pressure on households, and retail sales for July fell more than expected.
"July's retail sales provide very little evidence that household spending is 'stabilizing,' " Capital Economics U.S. economist Paul Dales said Thursday in a note to clients. "In fact, they show that falling employment, slowing wage growth and a limited access to credit are still taking their toll on spending."
