Initial Jobless Claims Increase
The number of U.S. workers filing new claims for jobless benefits rose last week, and an increase in those continuing to receive payments suggests fired employees are having trouble finding work.
“So few new jobs are being created, said Steven A. Wood, chief economist at FinancialOxygen Inc. in Walnut Creek, Calif. “These data suggest that payroll employment is likely to be negative for August.”
Initial jobless claims rose by 8,000 to 393,000 in the week that ended Saturday from a revised 385,000 the prior week, the Labor Department said. The four-week moving average of claims, which smooths out volatility in the weekly numbers, rose to 378,750 from 372,000 the prior week.
The number of people collecting unemployment benefits surged to 3.18 million in the week ended Aug. 11, from 3.05 million the week before. That’s the highest since 3.21 million in September 1992.
Some workers whose companies announced job cuts earlier this year are only this month seeking to collect jobless benefits.
Still, the report showed some signs that the pace of payroll trimming may be starting to ease. Last week was the fifth in a row that first-time benefit claims stayed below 400,000.
“The fact that claims are still far below 400,000 is quite compelling,” said Lara Rhame, an economist with Brown Bros. Harriman & Co. in New York. “The economy is so far able to manage this slowdown.”
Also, the number of workers receiving benefits, while at a nine-year high, represents a smaller percentage of the work force than it did nine years ago.
Analysts say it’s critical that the pace of job losses slow. A continuing surge of layoffs would threaten consumer spending, which accounts for about two-thirds of the economy.
The economy grew at a 0.7% annual pace in the second quarter; analysts surveyed by Bloomberg News expect revisions to be announced next week will show the economy didn’t grow at all during the quarter. That would be the worst showing in eight years.
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Longer Line
The number of people collecting unemployment benefits surged to 3.18 million in the week ended Aug. 11, the highest since 3.21 million in September 1992, government data show. Weekly data in millions
Aug. 11: 3.18 million
Source: Bloomberg News
