New Jobless Claims Drop Sharply to 565K

New Claims Hit Lowest Mark Since January, but Continuing Claims Climb to New High of 6.88M

(AP)  The number of newly laid-off workers filing initial claims for jobless benefits last week fell to lowest level since early January, largely due to changes in the timing of auto industry layoffs.

Continuing claims, meanwhile, unexpectedly jumped to a record-high. While layoffs are slowing, unemployed workers are having a difficult time finding new jobs. The unemployment rate rose to 9.5 percent last month and is expected to top 10 percent by the end of this year.

New claims for unemployment insurance plummeted by 52,000 to 565,000, the Labor Department said Thursday. That's significantly below analysts' expectations of 605,000, according to Thomson Reuters. The last time new claims were below 600,000 was week of Jan. 24.

The drop resulted partly from technical factors, a department analyst said. Auto layoffs that normally take place in early July, as factories are retooled to build the next year's models, occurred in the spring instead as General Motors Corp. and Chrysler LLC implemented sweeping restructuring plans.

The department's seasonal adjustment process expected a large increase in claims from auto workers and other manufacturing workers, the analyst said. Since that didn't occur, seasonally-adjusted claims fell.

The non-seasonally adjusted figure increased by about 17,000 to 577,506 initial claims.

Still, continuing claims jumped 159,000 to 6.88 million, the highest on records dating from 1967. Analysts had expected 6.71 million continuing claims.

Continuing claims had fallen in two of the previous three weeks. The data lag initial claims by a week.

Economists are closely watching the level of first-time claims for signs the economy will recover in the second half of this year, as many predict. But the change in the timing of auto layoffs will likely muddy the picture next week as well, the Labor Department analyst said.

The four-week average of initial claims, which smooths out fluctuations, fell to 606,000, down more than 50,000 from its peak in early April.

Still, claims remain elevated: they were at 367,000 a year ago.

Consumers and businesses have cut back on spending in response to the bursting of the housing bubble and the financial crisis, sending the economy into the longest recession since World War II.

The Labor Department said last week that employers cut 467,000 jobs in June and the unemployment rate rose to 9.5 percent, the highest in 25 years.

The payroll cuts last month were greater than analysts expected, renewing concern that jobs will remain scarce even if the economy does eke out growth later this year.

Some employers are still shedding jobs. Gannett Co. Inc., which publishes USA Today and 85 other daily newspapers, said last week that it will eliminate about 1,400 jobs, or 3 percent of its work force.

Among the states, New Jersey reported the largest increase in initial claims, with 7,876, which it attributed to seasonal layoffs related to school closings and manufacturing job cuts. The next largest increases were reported by Massachusetts, Kansas, Kentucky and New York. The state data lags initial claims by one week.

Florida reported the largest decrease, with 12,493, which it attributed to fewer layoffs in the construction, manufacturing and agriculture industries. Illinois, Pennsylvania, California and Tennessee reported the next largest drops.

[sjc_1]

We have had a $2 trillion CDO/CDS blow out, a financial freeze and a credit crunch, these have taken their tole and it will take a while to recover. We should see better jobs numbers by September and better growth numbers first quarter next year. Until then, people will have to help each other get through this, just like in past recessions.

[GiveMeFreedom]

Obama and Geithner - coming soon to a town near you - more unemployed, less work, but they will take care of you. If you have a beautiful daughter with a nice rear end, they and Sakozy will be all over her.

[debinok1]

I am sooooooooooo tired of the BS. Over 1/2 a million jobs gone AGAIN, and AGAIN the media is trying to make it sound positive. The REAL unadjusted unemployment is at least 20% by now. That is roughly 60 MILLION people out of work. This not a GOOD thing. This is a DEPRESSION. I realize that this mess took 30+ years to make and it wont be fixed in 6 months, but quit shoving the rose colored, feel good crap down everyones throat, WE KNOW BETTER!!!

[joule18]

Jobs are few and far between with many more people competing for them. Businesses are holding tight in view of proposed Cap and Trade, etc. and who can blame them?

The jobs I have seen recently have been part-time, 1099, or the pay offered is $8-$10 per hour for what used to pay $15 or higher per hour. I don't think it is all necessarily "greedy employers", but employers conserving cash in this uncertain economic environment where banks are reluctant to lend for expansion and the pool of buyers from their products has shrunk. The only people adding jobs seems to be the government.

[dlsako]

I an curious the difference in percent of national unemployment vs population. It may not be fair to just cite numbers. We have a much larger population than in 1933. Our number getting unemployment has increased because our population is probably the highest ever. Although unemployment is high, it may be much better than the recession in 1933. Remember, government spending (for war) is what took us out of the recession. Now government spending for peace may be able to help us. The reckless spending by the Bush Administration and continued and enhance freedoms which were abused by greed led us to this.

[joule18]

"The reckless spending by the Bush Administration"? Are you serious? Your hero Obama with the backing of Soros is spending us into oblivion and HIS spending is more than the spending of all 43 previous presidents combined.

I don't recall anyone complaining about the economy until about 2 months prior to the election when it was convenient for Soros and friends to manipulate the market to favor their pick for POTUS.

[anti-global2]

how is it if someone points out the truth, and that truth does not make the administration look good you are bitter?
Are we supposed to candy coat everything because Obasma's administration did it?
I am not blaming this administration for the economic conditions that started well before they came into office, but they have only aggravated the situation since taking over.
The stimulus is not wroking at all, and Biden even said it himself, and he said they underestimated how bad things were. I don't see how they did that, I knew how bad things were sitting in my office everyday looking at the reports.
A second stimulus will be even worse, it is like throwing good money after bad. Stop spending and cut taxes, that will spur growth.

[hclinton2012]

This data doesn't count all those that were "fired or terminated" for no reason but for the company not to pay "Unemployment Insurance" payment to the states? That is why there is a very far difference between the "job losses" every month and the Unemployment date each week. Last month, weekly job loss was only 250,000 compare to the 467,000 job loss in June 2009? ADP has the numbers more correctly every month.

[whitemale08]

Has anyone seen who's flippin' burgers now at your local fast food joint?

It's the so-called 'sophisticated' yuppie.

College students are being pulled out of the disco clubs and working behind the check-out lanes @Wal Mart and pushing carts @Target.

That's economic recovery?

Give me a break.

[cs4466]

Hon, you've never been a "sophisiticated yuppie". You've always just been poor bitter white trash.

[lost_america]

More good news:

It has also been reported that the Titanic has stopped sinking and remains stable at the bottom of the ocean. According to an unnamed administration offical this is a clear indication that their policy for preventing ships that hit icebergs from sinking is working.

[cs4466]

Stimulus plan starting to work, republicans reportedly pee the pants scared. I think I'll buy some stock in "Depends" as the poor bitter republicans will probably be buying a lot more of their products in the near future.

[GiveMeFreedom]

Buy them for yourself. I am buying and selling real estate and making a killing right now. Lots of dumb democrats overpaid in my town and now they are all out of jobs. So I buy them cheap and then rent them to these same democrats. Love making money off of you lovable losers.

[anti-global2]

isn't is funny how as soon as people start refuting this story with fact hee in the comments section they pull it off of the top of the page.
i am wondering if CBS is actually on the govt' payroll or have just beed promised bailout money sometime in the future.

[spudder8]

As some just mentioned the real unemployment rate is between 15 & 17% I heard from an economist that it is 17.5 and going higher. Th problem the way that I understand it is the stimulus that is in play now only alotted 10% for new jobs, the balance which will be released at later a time was payback to the people that helped Obama get elected. This administration is a total joke and their actions show it. The Cap & tax bill should push us closer to the edge and the health care package will push us over. These congressional momo's need to be replaced starting in the next election, especially the one that laugh the idea that they were supposed to read the bills The jok will be on them.

[anti-global2]

A few things:
1. THe weekly numbers improved due to the hoilday and seasonal factors, but people re-filing for continued unemployment rose again to an all time high. This is a more important stat as it truly reflects the economic climate
2. This is not a recession, it is a depression. A recession is a temporary problem with supply and demand. As prices come down supply evens out and the market corrects it self. In this situation we are in it is not a supply and demand problem. THe problem was created by bubbles that were created intentionally, like they are going to try and do again with green jobs, by manipulating company books (earning reports ect), by creating shady investment products, by speculation, issuing loans those who could not pay, just to name a few things. This has collapsed the economy and we are now in a depression. We know this because the leading factor in the state of the economy is not the stock market it is employment. The govt' knows this, why do you think they keep changing the way they figure out unemployment rates? THe real rate is some where between 15 to 17%. Five years after the start of the last depression the unemployment rate was 25%, so we have years to go and at least 10% higher unemployment until things bottom out.
Have a nice day.

[geminispyder-2009]

"The Labor Department says the number of first-time jobless claims plummeted by 52,000 to a seasonally adjusted 565,000, the lowest level since early January. That's significantly below analysts' expectations of 605,000."

Way to go media.
If you want to pass this off as good news, tell that to the 565k people that lost those jobs.

[WayAround]

Only msnbc is reporting the full truth in their headline:

"total reaches new record"

[skyk-2009]

I'd suppose you think we'd be able to dig out of the Worst Economic Meltdown without problems? We're going to get out and we're going to be fine. Lets just remember that it was WALL STREET who got us into this... GREED and Big Corporations. When we again dig out let's NOT return to Trickle Down. That's the only REAL lesson we should all take from this.

[cbs4111]

The average length of a recession in the last 50 years is 11 months. This one has already gone 18 months. Obama's plans seem to be prolonging the recession, not bringing it to an end. Plus, please don't forget that Congress has been under the control of the Democrats during the entire recesssion; the recession started about 1 year AFTER the Dems got control.

[WayAround]

"This one has already gone 18 months."

Technically, you're right. Remember, though, the government "fiddled" with the start date of this recession, backdating it by several months.

[skyk-2009]

Man you have got to be completely NUTS! What got us INTO the WORST economic MELTDOWN since the Great Depression was BLIND STINKING GREED! Now YOU and so many like you would sit here DAY after DAY and call anyone on here a "Liberal" when we objected to the Constant Drum Beat of getting the Government off the Backs of the CEO's. They should pay taxes you said... They shouldn't have to live with Regulations YOU said. I don't know how long it'll take us to dig our way out this time but as far as I'm concerned the Republican Party is DEAD!

[robinspp]

It seems Obama's plans started to work.

[nanc12]

Will the neocons ever realize that Acorn wasn't an issue to begin with, and no one cares? BTW rowdy - ANOTHER new nic? Does this make about 150?

[skyk-2009]

Oh we're going to dig ourselves out of this just like we always have. We have a young President who is as cool under fire as anyone I've ever seen. He's going to get it done. What I can't understand is those who continue to look to and believe the one's who got us into this mess. Let's NOT kid ourselves like we did under Clinton. Greed, PURE SELFISH BLIND greed got us into BOTH messes. The LAST people we should be listening to right now is the Conservative Southern Leadership of the Republican Party.

[dlsako]

I agree. He has only been in office 5 months. When was the last time you had this magnatude of a project that was completed in 5 months. Also with reblicians fighting him tooth and nail, it helps to but the brakes on the stimulus.

[John_Merritt]

Robin, bless you for being so honest and trusting of others. Having been around for awhile, this recession is one I have never seen in my lifetime; and most professionals state the same. We are bleeding jobs at a record pace, with no real end in sight.

When various States having to issue IOU's and meeting huge budget deficits, they are going to start reducing manpower and manhours. We are starting to see that already. What is different about this time?

Housing has invariably, always, led us out of other recessions but not this time. There is no one sector that is peaked to lead us out of this recession. As a fact, there is NO SECTOR that can turn this thing on a dime, and that is what we need right now.

So even when 'stability' comes into play, companies are going to wait 6-9 months before adding to their vacancies because there is this large shroud of uncertainty remaining. Meanwhile we will be at or > than 10%-11% unemployment, with no buffer to add people back into the mainstream of job growth.

Unfortunately, we are in a long down trend and the administration is either waiting too long to make it happen, or they (jobs) are being held up in red tape. Either way people are going to have to hunker down like never before.

One upside is that people will live within their means again. Their spending will be less and their savings more. The downside to that, is money not spent in goods means they are not being purchased, thus revenues will be down to flat with only marginal profits for companies. So we will be going in circles again, unless exports from Asia and Europe pull us out of this downward spiral. One can only hope for that scenario.

I can go on about other scenarios, i.e. inflation, deflation, stagflation but that remains to be seen just what is going to transpire on the world markets that predicates that, as well as the US dollar and interest rates, etc.