WASHINGTON, July 9, 2009
New Jobless Claims Drop Sharply to 565K
New Claims Hit Lowest Mark Since January, but Continuing Claims Climb to New High of 6.88M
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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.
© MMIX The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
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See all 27 CommentsThe 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.
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.
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.
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.
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.
i am wondering if CBS is actually on the govt' payroll or have just beed promised bailout money sometime in the future.
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.
Way to go media.
If you want to pass this off as good news, tell that to the 565k people that lost those jobs.
"total reaches new record"
Technically, you're right. Remember, though, the government "fiddled" with the start date of this recession, backdating it by several months.
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.
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