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Archive for Friday, May 21, 2010

Great recession Jobless claims rise, defying forecasts

May 21, 2010

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Deji Ayoade, right, of Queens, who has been out of work for six months, looks over a list of available jobs as Jaclyn Coughlan, center, a recruitment specialist with the Visiting Nurse Service of New York, speaks to another job applicant this week during the “Putting New Yorkers Back to Work” Job Fair sponsored by The New York Society for Ethical Culture in New York. The number of newly laid-off workers filing claims for unemployment benefits unexpectedly rose last week to the highest level in a month.

Deji Ayoade, right, of Queens, who has been out of work for six months, looks over a list of available jobs as Jaclyn Coughlan, center, a recruitment specialist with the Visiting Nurse Service of New York, speaks to another job applicant this week during the “Putting New Yorkers Back to Work” Job Fair sponsored by The New York Society for Ethical Culture in New York. The number of newly laid-off workers filing claims for unemployment benefits unexpectedly rose last week to the highest level in a month.

— The number of people applying for unemployment benefits shot up 25,000 in the latest week, indicating continued weakness in the U.S. job market, government data showed.

Initial jobless claims rose to 471,000 in the week ended May 15, the highest level in a month, the Labor Department reported Thursday.

Economists surveyed by MarketWatch predicted initial claims would drop on the week, falling to a seasonally adjusted 440,000 from last week’s revised reading of 446,000.

A Labor Department official said there were no unusual factors to explain the latest increase.

The four-week average of initial claims — a better gauge of employment trends than the volatile weekly number — also rose, up by 3,000 to 453,500.

“This is horrible,” chief U.S. economist Ian Shepherdson of High Frequency Economics said in an e-mail, suggesting the possibility of further increases. “One bad week does not make a trend, though, and we need to see much more data before we can be sure.”

While initial claims have fallen 25 percent from 12 months ago, they are now 3.6 percent higher compared with the end of 2009 in a reflection of the scarcity of new jobs.

Most economists say claims need to fall below 400,000 to signify accelerating job creation.

About 8.2 million Americans lost jobs during the trough of the recession in 2008 and 2009, and many have not been able to find work.

Although the economy has added about half a million jobs in the first four months of 2010, the pace of hiring is still unusually slow by historical terms — and some of those new jobs are temporary slots associated with the U.S. Census.

Nevertheless, most economists believe a U.S. recovery is under way and that, barring a major domestic or global crisis, the economy should continue to heal.

“The recovery, both in the labor market and more generally, was never going to happen in a straight line, and temporary setbacks are not uncommon,” wrote economist Omair Sharif of RBS. “So we would brush this figure off unless we see further confirmation of a sustained pickup in layoffs.”

Altogether, 9.95 million people were collecting some type of unemployment benefits in the week ended May 1, down from 10.15 million. The numbers are not seasonally adjusted.

The number of people who continue to receive regular unemployment checks declined by 40,000 to a seasonally adjusted 4.63 million in the week ended May 8. That’s the most recent data available.

Those receiving extended federal benefits declined to 5.34 million from 5.41 million in the week ended May 1, not seasonally adjusted.

Extended benefits are offered to some workers after they use up eligibility for state unemployment compensation, usually 26 weeks. Congress has extended benefits for up to 99 weeks in the states hardest hit by the recession.

Economists say the decline likely reflects the exhaustion of benefits and doesn’t indicate a sudden availability of new jobs.

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