November 19, 2009 3:58 PM
- Text
New Jobless Claims Unchanged at 505K
(AP)
The number of newly laid-off workers seeking unemployment insurance was unchanged last week, remaining above the level that would indicate the economy is adding jobs.
Still, new claims — which are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers — are down about 22 percent from this spring.
The Labor Department said Thursday that first-time claims for jobless benefits were a seasonally adjusted 505,000, the same as the previous week's revised figure and matching analysts' expectations. A year ago, there were 533,000 initial claims.
The four-week average, which smooths out volatility, fell for the 11th straight week to 514,000, the lowest level in almost a year.
While the steady decline in claims is evidence that firings are decreasing, most economists say weekly claims would have to fall to about 425,000 for several weeks to signal that the economy is actually adding jobs. Some economists put the number higher, around 475,000.
Even as claims are falling and the economy has started growing, the unemployment rate is continuing to rise. It jumped to 10.2 percent in October from 9.8 percent, the highest level in more than 26 years, the government said earlier this month.
Federal Reserve Chairman Ben Bernanke said early this week that the economy is likely to grow at a "moderate" pace. As a result, the jobless rate "likely will decline only slowly," he said in a speech Monday.
The economy grew at a 3.5 percent annual rate in the July-September quarter, the government said last month. Many economists expect growth to slow in the current quarter as recent reports on industrial production and housing have been disappointing.
The number of people continuing to claim benefits, meanwhile, dropped by 39,000 to 5.6 million for the week ending Nov. 7, the department said. The figures on continuing claims lag initial claims by a week.
But the continuing claims figure does not include millions of people that have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.
Nearly 4.2 million people were receiving extended benefits in the week ended Oct. 31, an increase of 120,000 from the previous week.
Congress added 14 to 20 weeks to the extended program Nov. 6, the fourth extension since the recession began and the longest total extension on record. That boosted the total number of weeks a person could collect unemployment to as much as 99 in the hardest-hit states.
But more than 1 million people will run out of unemployment benefits in January unless Congress quickly extends federal emergency aid, a nonprofit group said Wednesday. The November extension didn't address an underlying problem: The emergency unemployment compensation program, including all additional weeks, expires at the end of this year.
Some employers are continuing to lay off workers. In a securities filing Thursday, AOL said it plans to cut about a third of its work force once it is spun off from the media conglomerate Time Warner Inc. That would amount to nearly 2,300 of the roughly 6,900 workers at the struggling Internet company.
Hartford, Conn.-based health insurer Aetna Inc. this week said it will cut 625 jobs, or nearly 2 percent of its staff, and will make a similar job cuts in the first quarter of 2010 due to the lagging economy and the potential impact of health care reform.
Cell phone handset maker Sony Ericsson said it will move its North American headquarters to Atlanta from Research Triangle Park, N.C., and close a half-dozen sites worldwide. The closures are part of a plan to cut 2,000 jobs, or 20 percent of its global work force.
Several state governments also announced layoffs, including Pennsylvania, Indiana and Maryland.
Among the states, Michigan had the largest increase in claims, with 6,001, which it attributed to layoffs in the automobile, construction and service industries, according to the federal report. New Jersey, Pennsylvania, New York and Ohio had the next largest increases. The state data lag initial claims by one week.
Florida had the largest drop in claims, with 1,915, which it attributed to fewer layoffs in the construction, manufacturing and agriculture industries. Arkansas, Oregon, South Carolina and West Virginia also reported decreases.
Still, new claims — which are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers — are down about 22 percent from this spring.
The Labor Department said Thursday that first-time claims for jobless benefits were a seasonally adjusted 505,000, the same as the previous week's revised figure and matching analysts' expectations. A year ago, there were 533,000 initial claims.
The four-week average, which smooths out volatility, fell for the 11th straight week to 514,000, the lowest level in almost a year.
While the steady decline in claims is evidence that firings are decreasing, most economists say weekly claims would have to fall to about 425,000 for several weeks to signal that the economy is actually adding jobs. Some economists put the number higher, around 475,000.
Even as claims are falling and the economy has started growing, the unemployment rate is continuing to rise. It jumped to 10.2 percent in October from 9.8 percent, the highest level in more than 26 years, the government said earlier this month.
Federal Reserve Chairman Ben Bernanke said early this week that the economy is likely to grow at a "moderate" pace. As a result, the jobless rate "likely will decline only slowly," he said in a speech Monday.
The economy grew at a 3.5 percent annual rate in the July-September quarter, the government said last month. Many economists expect growth to slow in the current quarter as recent reports on industrial production and housing have been disappointing.
The number of people continuing to claim benefits, meanwhile, dropped by 39,000 to 5.6 million for the week ending Nov. 7, the department said. The figures on continuing claims lag initial claims by a week.
But the continuing claims figure does not include millions of people that have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.
Nearly 4.2 million people were receiving extended benefits in the week ended Oct. 31, an increase of 120,000 from the previous week.
Congress added 14 to 20 weeks to the extended program Nov. 6, the fourth extension since the recession began and the longest total extension on record. That boosted the total number of weeks a person could collect unemployment to as much as 99 in the hardest-hit states.
But more than 1 million people will run out of unemployment benefits in January unless Congress quickly extends federal emergency aid, a nonprofit group said Wednesday. The November extension didn't address an underlying problem: The emergency unemployment compensation program, including all additional weeks, expires at the end of this year.
Some employers are continuing to lay off workers. In a securities filing Thursday, AOL said it plans to cut about a third of its work force once it is spun off from the media conglomerate Time Warner Inc. That would amount to nearly 2,300 of the roughly 6,900 workers at the struggling Internet company.
Hartford, Conn.-based health insurer Aetna Inc. this week said it will cut 625 jobs, or nearly 2 percent of its staff, and will make a similar job cuts in the first quarter of 2010 due to the lagging economy and the potential impact of health care reform.
Cell phone handset maker Sony Ericsson said it will move its North American headquarters to Atlanta from Research Triangle Park, N.C., and close a half-dozen sites worldwide. The closures are part of a plan to cut 2,000 jobs, or 20 percent of its global work force.
Several state governments also announced layoffs, including Pennsylvania, Indiana and Maryland.
Among the states, Michigan had the largest increase in claims, with 6,001, which it attributed to layoffs in the automobile, construction and service industries, according to the federal report. New Jersey, Pennsylvania, New York and Ohio had the next largest increases. The state data lag initial claims by one week.
Florida had the largest drop in claims, with 1,915, which it attributed to fewer layoffs in the construction, manufacturing and agriculture industries. Arkansas, Oregon, South Carolina and West Virginia also reported decreases.
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