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Bigger climb in new US jobless claims
By Christopher S. Rugaber |
May 15, 2009, Friday
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Print Edition
Print Edition
NEW jobless claims in the United States rose more than expected last week due partly to an increase in layoffs by the automobile industry, while the number of Americans continuing to receive unemployment benefits set a record for the 15th straight week.
Wholesale prices also rose more than expected, according to government data released yesterday, but economists said inflation remains under control and that the threat of a dangerous bout of falling prices is remote.
The Labor Department said the number of new jobless claims rose to a seasonally adjusted 637,000, from a revised 605,000 the previous week. That's above analysts' expectations of 610,000.
Economists focused on the fact that initial claims remain below the peak reached in late March, a sign that the wave of mass layoffs announced earlier this year has crested.
"This is yet more evidence that we are now past the worst," Paul Dales, US economist at Capital Economics, wrote in a research note.
Separately, the department said wholesale prices gained 0.3 percent last month, larger than the 0.1 percent gain economists had expected. The biggest jump in food costs in more than a year offset a second monthly decline in the price of energy products.
Even with the larger-than-expected gain in the Producer Price Index last month, wholesale prices over the past year have fallen 3.7 percent, the biggest 12-month decline since 1950. While falling prices can raise fears about deflation, economists believe the efforts by the Federal Reserve to combat the recession will prevent a dangerous bout of falling prices.
Most of the increase in jobless claims was due to auto layoffs, a department analyst said.
Economists estimate Chrysler LLC has laid off 27,000 workers in the wake of its April 30 bankruptcy filing.
Chrysler yesterday told a bankruptcy court it plans to eliminate 789 of its dealers - or about 25 percent of them - nationwide as part of its restructuring process.
General Motors Corp has said it will temporarily shut 13 manufacturing plants beginning later this month through July, potentially affecting 25,000 workers.
Wholesale prices also rose more than expected, according to government data released yesterday, but economists said inflation remains under control and that the threat of a dangerous bout of falling prices is remote.
The Labor Department said the number of new jobless claims rose to a seasonally adjusted 637,000, from a revised 605,000 the previous week. That's above analysts' expectations of 610,000.
Economists focused on the fact that initial claims remain below the peak reached in late March, a sign that the wave of mass layoffs announced earlier this year has crested.
"This is yet more evidence that we are now past the worst," Paul Dales, US economist at Capital Economics, wrote in a research note.
Separately, the department said wholesale prices gained 0.3 percent last month, larger than the 0.1 percent gain economists had expected. The biggest jump in food costs in more than a year offset a second monthly decline in the price of energy products.
Even with the larger-than-expected gain in the Producer Price Index last month, wholesale prices over the past year have fallen 3.7 percent, the biggest 12-month decline since 1950. While falling prices can raise fears about deflation, economists believe the efforts by the Federal Reserve to combat the recession will prevent a dangerous bout of falling prices.
Most of the increase in jobless claims was due to auto layoffs, a department analyst said.
Economists estimate Chrysler LLC has laid off 27,000 workers in the wake of its April 30 bankruptcy filing.
Chrysler yesterday told a bankruptcy court it plans to eliminate 789 of its dealers - or about 25 percent of them - nationwide as part of its restructuring process.
General Motors Corp has said it will temporarily shut 13 manufacturing plants beginning later this month through July, potentially affecting 25,000 workers.
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