US claims falling as job market improves
By Christopher Rugaber |
June 4, 2010, Friday
|
Print Edition
Print Edition
NEW claims for unemployment insurance in the United States fell for the second straight week, fresh evidence the job market is slowly improving.
And productivity grew at a slower rate in the first quarter of this year than previously thought, suggesting that businesses are reaching the limits of their ability to boost output with fewer workers. That implies they will need to hire more employees.
US Labor Department said yesterday that initial claims for jobless benefits dropped last week by 10,000 to a seasonally adjusted 453,000.
Still, the declines come after a sharp increase three weeks ago, and claims remain at elevated levels.
After falling steadily in the second half of last year, claims have leveled off and are now only slightly below the level they were at the beginning of this year. That's raised concerns that hiring is still sluggish.
The four-week average, which smooths volatility, rose for the third straight week to 459,000. That's down by only 8,000 from its level in mid-January.
Claims above 400,000 are generally associated with a shrinking economy.
But many economists attribute the current high level of claims to a greater willingness by laid-off workers to seek unemployment benefits.
In a healthier economy, workers who lose jobs expect to find another one quickly and don't necessarily file for jobless aid.
But according to this view, after a deep recession, people who lose their jobs are more likely to request benefits and claims stay elevated even as the economy recovers.
Separately, the department said that productivity advanced at an annual rate of 2.8 percent in the January-March period.
That is the slowest pace in a year and much lower than the 3.6 percent that the government initially reported a month earlier.
And productivity grew at a slower rate in the first quarter of this year than previously thought, suggesting that businesses are reaching the limits of their ability to boost output with fewer workers. That implies they will need to hire more employees.
US Labor Department said yesterday that initial claims for jobless benefits dropped last week by 10,000 to a seasonally adjusted 453,000.
Still, the declines come after a sharp increase three weeks ago, and claims remain at elevated levels.
After falling steadily in the second half of last year, claims have leveled off and are now only slightly below the level they were at the beginning of this year. That's raised concerns that hiring is still sluggish.
The four-week average, which smooths volatility, rose for the third straight week to 459,000. That's down by only 8,000 from its level in mid-January.
Claims above 400,000 are generally associated with a shrinking economy.
But many economists attribute the current high level of claims to a greater willingness by laid-off workers to seek unemployment benefits.
In a healthier economy, workers who lose jobs expect to find another one quickly and don't necessarily file for jobless aid.
But according to this view, after a deep recession, people who lose their jobs are more likely to request benefits and claims stay elevated even as the economy recovers.
Separately, the department said that productivity advanced at an annual rate of 2.8 percent in the January-March period.
That is the slowest pace in a year and much lower than the 3.6 percent that the government initially reported a month earlier.
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