WASHINGTON, Nov. 5, 2009
(AP) The number of newly laid-off U.S. workers filing claims for unemployment benefits last week fell to the lowest level in 10 months, evidence that job cuts are easing as the economy slowly heals.
New Jobless Claims Drop to 512K
Lower-Than-Expected Figures Best Performance Since January
Still, companies are reluctant to hire and economists expect the unemployment rate will tick up to 9.9 percent when October's figure is reported Friday. The jobless rate hit a 26-year high of 9.8 percent in September.
The Labor Department said Thursday that first-time claims for jobless benefits fell by 20,000 to a seasonally adjusted 512,000. That's better than economists' estimates of 523,000.
Economists closely watch initial claims, which are considered a gauge of the pace of layoffs and an indication of employers' willingness to hire new workers.
The four-week average, which smooths fluctuations, dropped to 523,750, its ninth straight decline. That's 135,000 below the peak for the recession, reached in early April.
Despite the improvement, initial claims remain well above the roughly 400,000 that economists say will signal job creation.
The economy grew at a 3.5 percent annual pace in the July-September quarter, the government said last week, ending a record four straight quarters of decline and providing the strongest signal yet that the recession is over.
But economists worry that growth will slow early next year as various government stimulus programs wind down. That uncertainty has made many employers reluctant to hire.
On Wall Street, the better-than-expected jobless claims report gave investors hope that the monthly unemployment report also might beat expectations. The Dow Jones industrial average added more than 130 points in morning trading, and broader indexes also gained.
Many companies also are squeezing more production from their existing work forces. Productivity, the amount of output per hour worked, jumped 9.5 percent in the third quarter, the Labor Department said in a separate report. That's the sharpest increase in six years, and it enables companies to produce more without hiring extra workers.
Some economists were encouraged by the productivity report, saying that eventually companies will have to add jobs, rather than simply push their existing work forces harder.
Economists expect the nation lost a net total of 175,000 jobs last month, adding to the 7.2 million lost since the recession began in December 2007.
The number of people claiming jobless benefits for more than a week fell by 68,000 to 5.75 million, above analysts' estimates but the eighth drop in nine weeks. The continuing claims data lag initial claims by one week.
Another 4.1 million people claimed extended unemployment benefits in the week ended Oct. 17, the latest data available, an increase of about 100,000 from the previous week. Congress has added 53 weeks of emergency aid on top of the 26 weeks typically provided by states.
Still, as roughly 7,000 Americans run out of extended benefits every day, the House is expected to approve legislation that would add another 14 to 20 weeks. The Senate unanimously approved a similar proposal Wednesday.
The National Employment Law Project, an advocacy group, estimates that up to 1.3 million people would exhaust their benefits without the extension.
Many analysts expect the unemployment rate could rise as high as 10.5 percent before the recovery gains enough steam to start pushing it down next summer. The concern is that the recovery and consumer spending, which accounts for 70 percent of economic activity, could falter if households remain squeezed by layoffs, stagnant wages and depleted savings.
The Federal Reserve pledged Wednesday to keep interest rates low for an "extended period," which central bank policymakers can do because wage and general inflation pressures have vanished during the steep downturn.
Some companies are still announcing job cuts. Microsoft said Wednesday that it will eliminate 800 jobs on top of 5,000 layoffs that it announced in January. And Johnson & Johnson said it could cut up to 8,300 jobs as part of a restructuring.
Among the states, California reported the largest increase in claims, with 14,394, which it attributed to layoffs in the construction, services, manufacturing and agriculture industries.
© MMIX The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Add a Comment See all 29 Comments
- Washington Post: While White House Denies Tuesday's Republican Victories Reflect on Obama, Many Dems See a Wakeup Call ......
Dow continues to surge on Tuesdays Republican wins. Obama in response to this Prosperity and Surging Dow says that the loss of 500,000 jobs by his administration is the real reason. Promises more of the same. Out of touch - Go figure! - Reply to this comment
- What good news? Over half million news claims for unemployment means people are losing their jobs still! and the expect the unemployment rate to hit 9.9% Only an economist or a politician can see this as good news.
Would be like a doctor telling you after a car wreck: Good news! We only have to take off your right leg--not both! So be happy. - Reply to this comment
- This good news is sure to outrage right wing nuts.
They'd rather see the country fail than see our President succeed at pulling the country out of the hole Bush put us in.
Why do they hate America so much?
Wasn't 8 disasterous years of Bush enough? - Reply to this comment
- Amazing! It truly is that we would be celebrating "only" over a half-million NEW layoffs. To see this as good news should be telling us that most Americans and media have no idea what reality is!
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- I'm in retail business and we've already started hiring for the holidays and the people we hire are all part-timers so I see the unemployment rate won't start dropping again till after the holidays and then that's when we'll see 10% unemployment I'm sure. A lot of part-time employees where I work are working a lot less hours then they ever did and are hurting big time and I'm sure they won't be buying much in the way of gifts for others this Christmas.
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- "Why try to go to work and earn your pay when you can stay home and do nothing? There are "help wanted" signs all over Louisiana - it's just easier for some to do nothing rather than take a possibly lower paying job."
And there you have it America! That was iloveusa2 reporting from Bubba's Quik Stop in Goatnut, La. - Reply to this comment
- I still love how we think this is positive losing 512K Jobs? So how many are we creating every month? Obama is not the solution nor is he the problem. The problem is the American consumer who for decades begain to slowly accept the imports because they were cheaper. We pushed out manufacturing because we did not want to pay for other American's to make a decent wage. But their is one thing Government accross the board is doing wrong. That's spending more then they take in. It is no different then a American getting into too much debt. Eventually you cannot even make the minimum payments.
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- Has anyone stopped to think that the reason the initial unemployment claims have dropped is actually due to the fact that employers have cut back so much that they are not laying off as many employees, not because the economy is that much better? There are thousands who have outlasted their unemployment checks and thousands who have just quit looking for a job - as long as the government continues to extend the benefits. Why try to go to work and earn your pay when you can stay home and do nothing? There are "help wanted" signs all over Louisiana - it's just easier for some to do nothing rather than take a possibly lower paying job.
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- how can this be true? afterall, we've been stimulated
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- wow, this looks promsing... what a joke
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- What oh What can they do with numbers. When they say 500,000 people were hired then we will have recovery. When it get's down to where only 100,000 people are working and 10,000 were laid off then they will really rejoice.
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- The blame rests with Congress and the President! The public should vote them all out and start over and if the new group doesn't perform then recall them! The time is now for government to serve the people!
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- Don't be to quick to blame the President. Most of the Problem is in Congress. Term Limits is the answer. No perks beyond the term and join the health care system we have to use. No lifetime benefits for the families etc.
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- Report: White House Overstates Job Growth
Number of Jobs Created or Saved Because of Stimulus Program Exaggerated,
The White House will soon put out news that President Obama's stimulus program has helped create or save thousands of jobs. But, as Chip Reid reports, the accuracy of its findings are in question.
CBS/ AP) An early progress report on President Barack Obama's economic recovery plan overstates by thousands the number of jobs created or saved through the stimulus program, a mistake that White House officials promise will be corrected in future reports.
Like this one? There they go again! - Reply to this comment
- Right wing nuts will find any reason to downplay this good news.
They'd rather see the country fail than see our President succeed at leading us out of the mess Bush put us in. - Reply to this comment
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- The democrats have controlled the countries fiscal policy since 2006 so spare us your poison. Better get your marijuana while you can because 2010 is going to be a repeat of 94.
- Exactly. If Bush didnt **** this all up, We could be stress free, not having to worry nearly as much as we have to now! Thank you elephants.
- by mav547166 November 5, 2009 9:57 AM EST
The democrats have controlled the countries fiscal policy since 2006 so spare us your poison. Better get your marijuana while you can because 2010 is going to be a repeat of 94.
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Wrong on both counts.
The Dems had a non veto proof majority in Congress from January of 2007. Fiscal policy is not set by Congress, it is set by the branch... the laws and budgets are then made by Congress.
And -- fiscal years go from Oct 1 to Sept 30 of the next year, so the 2007 Congress/Exec did not enact a budget until Oct 1, 2007...
Learn a bit about your country before you just repeat the "party line"... please.
No way is 2010 going to be a repeat of 1994 -- the political climate today is much different.
IF the Republicans would listen to Gingrich like they did then, they might have a chance to make a big dent in the Dem majority ... but it looks like they won't ... and they won't.
- Everyone thinks that a "Drop" in new claims is good. It is only the few remaining that are finally registering for benefits. That doesn't say how many are still looking, Have given up. and the Benefits have run out. We need someone to tell the REAL story.
- Reply to this comment
- This good news is sure to outrage right wing nuts.
They'd rather see the country fail than see our President succeed.
Why do they hate America so much.
Wasn't 8 disasterous years of Bush enough? - Reply to this comment
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- I'm just trying to hang on until the 2010 elections. History shows that when the Republicans are in full control of both houses we have the strongest growth and greatest prosperity IF there is a democrat in the White House. Lets make it happen !!
