U.S. New Jobless Claims Rise for Second Week

Claims totaled 576,000 last week

New claims rose unexpectedly for the second consecutive week, the Labor Department said on August 20, raising concerns that soaring jobless numbers could stifle recovery from prolonged recession.

The seasonally adjusted initial jobless claims increased by 15,000 to 576,000 in the week to August 15 from the previous week's revised 561,000.

Most analysts had expected claims to fall to 550,000 amid signs that the recession since December 2007 was easing.

The four-week moving average, which smooths out week-to-week volatility, was 570,000, an increase of 4,250 from the previous week's revised average of 565,750.

The total number of Americans receiving unemployment benefits also continued to mount. According to the department, the number for seasonally adjusted insured unemployment or continuing claims during the week ending August 8 was 6.24 million, an increase of 2,000 from the preceding week.

Two weeks after the government announced that the jobless rate had fallen one-tenth of a point to 9.4% in July on narrowing job losses, analysts said the new jobless numbers were worrying. "These are some pretty awful initial claims numbers when you stop to consider that they are still well north of the peak seen in the last two recessions, which was in the 400,000 to 450,000 range," said Patrick O' Hare of Briefing.com."The same holds true for continuing claims."

He warned that a protracted period of high unemployment or underemployment "remains a key risk to the growth outlook that has seemingly gone unappreciated in the latest" stock market rally.

The Labor Department's latest monthly labor report on August 7 said the unemployment rate fell to 9.4% in July as job losses narrowed to 247,000.

The report also said the size of the labor force had fallen by 422,000 in July. But some analysts believed a significant number of disenchanted workers had left the labor force and were not therefore listed as unemployed. The jobless rate, they warned, could rise as they reentered the labor force on better job prospects.

Unemployment could still hit as high as 10%, even with an improving economy, they warned.

The government estimated that the economy contracted 1% in the second quarter from a 6.4% contraction in the first quarter and a drop of 5.4% in the fourth quarter of 2008.

Copyright Agence France-Presse, 2009

TAGS: Talent
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish