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July 31, 2009

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Americans filing 1st-time claims rise

THE number of newly laid-off Americans filing first-time claims for jobless benefits rose last week, the government said, though the increase was mostly due to seasonal distortions.

The number of workers remaining on the jobless benefit rolls, meanwhile, fell to 6.2 million from 6.25 million, the lowest level since mid-April.

The Labor Department said new claims for unemployment aid increased by 25,000 to a seasonally adjusted 584,000. That's above analysts' estimates of 570,000.

A department analyst said the increase comes after claims were artificially depressed earlier this month by the timing of temporary auto factory shutdowns, which happened earlier this year than in most years. Still, this week's total is below the 617,000 initial claims reported late last month before the seasonal distortions began. It reflects a trend that economists say indicates a slowing pace of layoffs.

The four-week average of claims, which smooths out fluctuations, fell to 559,000, its lowest level since late January.

But jobs remain scarce and the unemployment rate, which hit 9.5 percent for last month, is expected to surpass 10 percent by year's end.

And weekly claims remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007. The lowest level this year was 488,000 for the week ended January 3.

The seasonal distortions are due to the fact that the auto firms shut their plants earlier than usual this year. They normally close their factories in early July and temporarily lay off thousands of workers as they retool plants to build new car models.

Those shutdowns happened in May and June this year as General Motors Corp and Chrysler LLC closed plants after filing for bankruptcy protection. That shift in timing caused new claims to fall sharply in the first two weeks of this month. The recession, which started in December 2007 and is the longest since World War II, has eliminated a net total of 6.5 million jobs. The jobless is expected to rise to 9.7 percent when the July figure is reported next week.

More job cuts were announced this week. Verizon Communications Inc on Monday said it would trim more than 8,000 jobs before the end of this year.


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