Initial job claims in US post huge drop
By Christopher S. Rugaber |
June 25, 2010, Friday
|
Print Edition
Print Edition
INITIAL claims for jobless benefits fell by the largest amount in two months in the United States last week, but remain above levels consistent with healthy job growth.
Despite the drop of 19,000, claims are at about the same level they were at the beginning of this year. The stubbornly high level of requests for jobless aid is a sign hiring remains weak even as the US economy recovers.
US Labor Department said yesterday that new claims dropped to a seasonally adjusted 457,000. That's slightly below economists' forecasts of 460,000, according to Thomson Reuters.
First-time requests for unemployment insurance have been stuck at about 450,000 since the beginning of this year. New claims dropped steadily last year after reaching a peak of 651,000 in March 2009. Claims need to fall closer to 425,000 to signal sustained job growth, many economists say.
The four-week average dipped by 1,500 to 462,750, the first drop in six weeks.
Separately, the Commerce Department said yesterday that orders for big-ticket manufactured goods fell by 1.1 percent last month as demand for commercial aircraft declined. But excluding the volatile transport sector, orders rose 0.9 percent, suggesting that manufacturing remains a key driver of the economic recovery.
The reports come as worries grow about the health of the economic recovery. New home sales dropped in May to their lowest level on records dating from 1963, the Commerce Department said on Wednesday. That followed a report earlier in the week that sales of previously-owned homes also fell last month, as tax credits for home buyers expired on April 30.
The Federal Reserve on Wednesday provided a more cautious outlook as it kept a key interest rate it controls near record lows. The Fed said the economic recovery is "proceeding," a more reserved judgment than in April, when it said economic activity continued to "strengthen." The Fed also said the labor market is "improving gradually."
Claims could rise for several reasons. Many economists say laid-off workers are more likely to seek benefits in a weak economy than in a strong one, because they have less hope of finding work. That would keep claims high even if layoffs aren't increasing.
Despite the drop of 19,000, claims are at about the same level they were at the beginning of this year. The stubbornly high level of requests for jobless aid is a sign hiring remains weak even as the US economy recovers.
US Labor Department said yesterday that new claims dropped to a seasonally adjusted 457,000. That's slightly below economists' forecasts of 460,000, according to Thomson Reuters.
First-time requests for unemployment insurance have been stuck at about 450,000 since the beginning of this year. New claims dropped steadily last year after reaching a peak of 651,000 in March 2009. Claims need to fall closer to 425,000 to signal sustained job growth, many economists say.
The four-week average dipped by 1,500 to 462,750, the first drop in six weeks.
Separately, the Commerce Department said yesterday that orders for big-ticket manufactured goods fell by 1.1 percent last month as demand for commercial aircraft declined. But excluding the volatile transport sector, orders rose 0.9 percent, suggesting that manufacturing remains a key driver of the economic recovery.
The reports come as worries grow about the health of the economic recovery. New home sales dropped in May to their lowest level on records dating from 1963, the Commerce Department said on Wednesday. That followed a report earlier in the week that sales of previously-owned homes also fell last month, as tax credits for home buyers expired on April 30.
The Federal Reserve on Wednesday provided a more cautious outlook as it kept a key interest rate it controls near record lows. The Fed said the economic recovery is "proceeding," a more reserved judgment than in April, when it said economic activity continued to "strengthen." The Fed also said the labor market is "improving gradually."
Claims could rise for several reasons. Many economists say laid-off workers are more likely to seek benefits in a weak economy than in a strong one, because they have less hope of finding work. That would keep claims high even if layoffs aren't increasing.
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