Continuing Jobless Claims at 20-Year High
Thu Jul 10, 9:02 AM ET Add Business - Reuters to My Yahoo!
By Tim Ahmann
WASHINGTON (Reuters) - The number of jobless Americans receiving benefits hit its highest point in over 20 years last month, and new claims for jobless aid unexpectedly rose again last week, the government said on Thursday.
Initial claims for unemployment insurance rose by 5,000 to a seasonally adjusted 439,000 last week from a revised 434,000 the prior week, the Labor Department said. Economists on Wall Street had expected claims to edge down a bit to 425,000 from the 430,000 originally reported for the week ending June 28.
The department also said the number of unemployed workers who remained on the benefit rolls after filing an initial claim jumped by 87,000 to 3.82 million in the June 28 week, the highest level since February 1983.
Economists cautioned that the July 4 Independence Day holiday and auto plant shutdowns made it more difficult to draw conclusions from the claims report. Nonetheless, they said it showed persistent labor-market weakness.
"It was a holiday week so we don't take it too seriously. But there's not good news for economy with the rise in the number of people making insured employment claims," said David Wyss, chief economist at Standard & Poor's Rating Service in New York.
"It's a continued jobless recovery," he said.
Jay Bryson, global economist at Wachovia Securities in Charlotte, North Carolina, agreed. "This would be a sign that the job market in general remains pretty sluggish, and we wouldn't expect that to improve until growth starts to pick up," he said.
Market reaction to the data, and a separate report showing a 0.8 percent rise in import prices in June, was muted.
A Labor Department aide cautioned against relying too heavily on the latest initial claims figure in gauging the jobs market, noting the auto plant shutdowns for annual retooling could be affecting the figures.
"I really think we're in a period now when any one week should be interpreted cautiously," he said, adding the four-week moving average of claims would provide a better labor-market barometer. Still, he noted the department's seasonal adjustment process had anticipated the plant shutdowns.
The four-week average of initial claims, which smoothes weekly volatility, rose by a slight 1,000 to 426,750.
It was the second consecutive weekly gain in initial claims, which reached their highest level in five weeks.
It was also the 21st consecutive week that claims have been over the 400,000 level, which economists say separates jobs' growth from loss.
The department said it was the longest string of weeks with claims over the 400,000 level since a jobs market downturn that ended in July 1992.
While most economists expect the economy to pick up over the remainder of the year after a spiritless start, they warn that labor market conditions may be slower to improve.
Two weeks ago it was reported at only at an all time high in ten years. What shall we do? Hey I know... Let's create enormous tax breaks for the rich, and they'll use all that extra money to hire these poor unfortunate people (not). How's my driving? Call 1-800-BUSH-DRIVES-COUNTRY-INTO-DITCH...