New Jobless Claims Plunge To 601K

Drop To Lowest Level Since January A Possible Sign Layoffs Have Peaked; Retail Sales Also Improve

(AP)  New applications for jobless benefits plunged to the lowest level in 14 weeks, a possible sign that the massive wave of layoffs has peaked. Still, the number of unemployed workers getting benefits climbed to a new record.

Retail results also improved as discounter Wal-Mart Stores Inc. and other stores reported April sales figures that beat expectations. Analysts acknowledged the positive economic signals but cautioned that any recovery will be subdued as long as unemployment stays high.

The Labor Department reported Thursday that the number newly laid off workers applying for benefits dropped to 601,000 last week. That was far better than the rise to 635,000 claims that economists expected.

But the total number of people receiving jobless benefits climbed to 6.35 million, a 14th straight record.

The four-week moving average of initial jobless claims, which smooths out volatility, totaled 623,500 last week, a decrease of more than 30,000 from the high in early April. Goldman Sachs economists have said a decline of 30,000 to 40,000 in the four-week average is needed to signal a peak.

Meanwhile, retailers' business last month was helped by warmer weather, tax refunds, and a shift in the Easter holiday, helping Wal-Mart and many mall clothing chains post better-than-expected results.

But consumer sentiment and business in many areas remains weak, and analysts expect a drawn-out recovery as unemployment remains high and other economic woes persist. Warehouse store operator Costco Wholesale Corp. reported a deeper-than-expected same-store sales drop, hurt by the closing of its stores on Easter.

In a separate report, the government said that productivity, the key ingredient to rising living standards, grew at a 0.8 percent annual rate in the January-March quarter, slightly better than the 0.6 percent increase that economists had expected. Wage pressures, as measured by unit labor costs, increased at a 3.3 percent rate, down from a 5.7 percent spike in the fourth quarter.

While wage pressures outpacing productivity normally would raise alarm bells about inflation, the threat of any price spikes is seen as remote. Regulators and economists are not worried about inflation since many workers are more concerned about keeping their jobs in the recession than demanding higher wages.

On Wall Street, stocks fluctuated following the upbeat labor and retail reports as investors awaited the formal release of results from the government's "stress tests" of bank balance sheets after the closing bell. The Dow Jones industrial average dipped about 85 points in afternoon trading and broader indices also slid.

Despite the big drop in new applications for jobless benefits last week, the claims remained at elevated levels. By comparison, weekly jobless claims totaled 372,00 a year ago.

But since peaking at 674,000 in late March, claims have been trending lower, raising hopes that the huge wave of layoffs that have rocked the country could be easing a bit.

Even if the recent declines signal that layoffs have peaked, economists do not expect them to return to pre-recession levels anytime soon. They expect the jobless rate will keep rising through the rest of this year even if their forecasts for an end to the recession in the second half of 2009 are accurate.

More job cuts were announced Thursday. Steelmaker Severstal International said it's idling plants in Wheeling, W.Va., and Warren, Ohio, resulting in 3,100 layoffs due to the continuing deterioration of the steel industry.

The government is scheduled to release unemployment data for April on Friday. Analysts expect the jobless rate will climb to 8.9 percent from the current 25-year high of 8.5 percent. Many analysts expect the jobless rate will hit 10 percent by the end of this year.

The rise in continuing claims to 6.35 million was registered for the week ending April 25, the latest data available. That was up from 6.30 million in the previous week and marked the highest tally on records dating to 1967.

The high level of continuing claims is a sign that many laid-off workers are having difficulty finding work.

More than 5 million jobs have vanished in the recession, and Federal Reserve Chairman Ben Bernanke on Tuesday predicted "further sizable job losses" in the coming months.

Among the states, Michigan saw the largest increase in claims with 9,998 more for the week ending April 25, which it attributed to more layoffs in the automobile industry, according to the Labor Department. The next largest increases were in Massachusetts, Kentucky, North Carolina and New York.

California saw the largest drop in claims with 10,833, which it said was due to fewer layoffs in the construction and service industries. The next biggest declines were in Georgia, South Carolina, Wisconsin and New Jersey.

More companies recently announced job cuts. General Motors Corp. laid out a restructuring plan that includes cutting 21,000 U.S. factory jobs by next year. Microsoft Corp. said it was starting thousands of the 5,000 job cuts it announced in earlier this year and left the door open to even more layoffs. Chip maker Atmel Corp. last week said it would lay off 300 people, or 5 percent of its work force.

[cjs_cnet_xyz]

There is no job stability for engineers who are U.S. citizens in the free market of this country. It is too tempting for CEOs and their staff to cut salaries and lay off citizens when they won't work a continual seven day work week like foreign labor. My advice to parents is to not let your children become engineers in this country. Other nations like India and China do not employ such a large percentage of Americans working in their countries. Yet there are companies here where 50-90% of the engineering workforce is foreign. When layoffs come, U.S. citizens still take the ax first.

[trillion1]

The loser rightwing can't get a break.

[fedup12]

I love how the poor loser recons always dub the media liberal. Heck they just got done on CBS hammering Obama on his budget and small attempts at cuts.

I think that CBS while maybe leaning left a little are WAY more centered than wacky right wing Faux Snooze.

[lost_america]

When the Titanic hit the bottom the headline read:

Good News! Luxury Liner stops sinking!

[lost_america]

Oh how the liberal media loves to spin things. PLUNGE to only 601,000. 14 week low!!! WooHoo.

Also a 14 week record of the people continuing to be out of a job.

**************************************************
Yes, I guess if 100% of the workerss lost their job this month, next month the figure would be 0

My job (by the way) is not lost, it was shipped to India

[leeanna59]

Python,

I finally understand why you are so angry. You didn't comment on my post that I was also stationed at Walter Reed from 1969 to 1971. What I saw and experienced at Walter Reed was certainly life-changing to me.

If you are not able to get compensation from the VA, I know someone who can help you. He has helped over 400 veterans get compensation. He is not an attorney.
Posted by leeanna59

[jonesjep]

Oh how the liberal media loves to spin things. PLUNGE to only 601,000. 14 week low!!! WooHoo.

Also a 14 week record of the people continuing to be out of a job.

[vinnyb5]

"PLUNGE". MY god how the MSM does everything they can to make this administration look good. When will they point out that only 17billion of the 700 trillion spending package had only been allocated (not even spent), and much of that is not even on job creation?

[presjfk]

thats a plunge?

[whitemale08]

So McDonald's starts hiring again to take up some of the 34,000 in slack.

Even if you could credit the 'bail-outs', it's un-sustainable.

CALL CONGRESS AND DEMAND AN END TO ALL BAILOUTS

CALL CONGRESS AND DEMAND THAT GOLDMAN SUCKS, JP MORGAN FILE CHAPTER 11!\

[notblue]

The headlines at leftwing central are always amazing and entertaining. If Bush were still president it would have been "Unemployment rates still at historic levels" LOL! Love the word "plunge" too funny!

[shimano35]

Change we can believe in!!

[quapawsix]

All we get from Washington and the Media are lies, lies, lies,rhetorical lies, and more lies, anyone can manipulate the numbers and make them say anything. Perfect examples ENRON, Madoff, AIG, the Banking industry and yes even the wonderful leaders in Washington. and all done at the expense of WE THE PEOPLE.
QUESTION when is the media going to start reporting the real news instead of the propaganda we are all being force to listen to. NO GOOD PAYING MIDDLE INCOME JOBS = NO ECONOMIC RECOVERY. The American workers both white collar and blue collar put the greedy owners of these corporations where they are and now they turn on the workers like rabid wolves and Washington does nothing for the people.

[patocc123]

That is only claims filed, when your unemployment runs out you aren't counted.
False numbers or just plain lies from our government.
Posted by grabandgo
---------------------------------------
But this administration is about transparency. How can that be. Are you saying that it doesn't matter who is charge they will manipulate the data.

[nanc72758]

I think they need to step back and do a recount of people ACTUALLY out of work. I know many people who have used up their unemployment benefits . . . those numbers say nothing as to the real world. And anyone who believes it, is not using their brains!

[slantedview]

Go ConstantineXI, you're right on!!!

One year we didn't get a $10 off turkey certificate for Thanksgiving because our employer said we didn't meet our projected $13 million in sales for that quarter. We only made him $11 million... boo hoo

Yeah, it's like that all over even in the government.

[debinok1]

Shouldn't the headline have read: "Jobless claims climb to a 14th straight record?" I was looking for a positive article and this is what I got... 35,000 fewer new jobless claims than economists thought and this is great news? someone help me out here...
Posted by ameroseas

You picked up on that to huh? Yeah, they are looking for any silver lining they can find, but I think they missed the mark on this one.

[slantedview]

Many of the unemployed are not even being counted because they don't qualify for benefits. Where I live you have to be unemployed under no fault of your own - but an employer can terminate your employment for ANY reason at any time.

If you think you have been terminated unjustly, you have to go file a claim with the labor board to even have a chance to collect unemployment benefits.

What about all those people who can't file claims? They're still unemployed and they don't get no help from nobody. Count them too if you're going to report on the "real" numbers of the unemployed. Otherwise, you don't have a story worth reading.

[ConstantineXI]

Unemployment was at 4.6% in 2006 before the Democratic Congress took over.
And the media said that that was awful under Bush then.
Now, with Unemployment forecasted to hit 10% after almost three years of a Democratic Congress and under Obama, the media praises Obama becaause we "only" lost 601,000 jobs last month.
And Obama, despite this massive job loss, prattles about how his stupid stimulus bill which he rammed through "created or saved" 150,000 jobs.
But the media is not bothered in the slightest by this obvious lie on Obama's part.
The new Orwellian media definition of success is now "it's a success because we didn't lose as many jobs as we did last month".

[debinok1]

"Plunge"? A 10% drop is "plunge"? Can we ease up on the sensationalism?
Posted by parisdakar

Not even 10%. It went from 623,500 last week to 601,000 this week. A drop of 22,500 is somewhere around 3 1/2%.