There's a disconnect here and I'm sure as hell missing it:
U.S. Initial Jobless Claims Fell 23,000 to 346,000
Last Week
By Brendan Murray
Washington, Aug. 2 (Bloomberg) -- The number of U.S. workers filing new
claims for state unemployment benefits unexpectedly declined last week to the
lowest level in almost 5 1/2 months, government figures showed.
Initial jobless claims fell by 23,000 to a level of 346,000 in the week that ended
Saturday from a revised 369,000 the prior week, the Labor Department said. The
decline may reflect the end of temporary shutdowns at the nation's automobile
factories and textile mills, as furloughed workers were recalled, a Labor
Department official said.
Still, initial claims in the last three weeks have fallen 103,000, the longest string of
declines since July 1998. The three- week total is more than double the 45,000
increase in claims in the first week of July and may reflect some slowdown in job
cuts.
``The fact that we had gone over 400,000 and are now coming down is a positive
sign,'' said Joel Naroff, chief economist at Naroff Economic Advisors in Holland,
Pennsylvania, before the report. ``We've reached a bottom as far as the labor
market is concerned.''
The four-week moving average of claims, which smoothes out volatility in the
weekly numbers, dropped to 395,250 from 409,750 a week earlier.
Analysts had expected jobless claims to rise to a level of 390,000 from a
previously reported 366,000. Last week's level of claims was the lowest since
333,000 in the week ended Feb. 17.
``It's normal for textile and automobile manufacturers to layoff a lot of people'' this
time of year for retooling of plants and recall them, said Esther Johnson, a Labor
Department official. This adds to the volatility of the numbers this time of year,
she said.
This Year's Average
This year, weekly jobless claims have averaged 382,800, up from the weekly
average of 302,800 last year and the most since 407,800 in 1992. The
government's statistics are based on requests for financial assistance administered
by state and territorial employment service agencies. Even if the pace of job cuts
is slowing, the unemployment rate may keep rising through year's end.
A monthly Labor Department report tomorrow is expected to show the U.S.
unemployment rate in July rose to 4.7 percent, according to analysts in a separate
Bloomberg survey. That would be the highest level of joblessness since March
1998.
The number of people collecting unemployment benefits fell to 3.002 million
during the week ended July 21, from 3.082 million in the prior week.
Companies are slashing costs to bolster profits as business slows with a sluggish
economy. The bulk of recent job losses have been in manufacturing, especially at
makers of business equipment. The economy grew in the second quarter at the
slowest rate in eight years as business investment slumped and consumer
spending cooled.
Slowing Economy
Growth increased at a 0.7 percent annual pace in the April- June period, down
from 1.3 percent in the first quarter, the latest Commerce Department figures
showed. The quarter was the fourth in a row with growth at less than 2 percent,
which last happened during the 1990-1991 recession.
ADC Telecommunications Inc. said yesterday that it will cut 2,500 more jobs, in
addition to the 7,000 positions it already eliminated. SPX Corp., a maker of
industrial products that completed the purchase of United Dominion Industries
Ltd. in May, said it expects to cut about 2,000 jobs during the next 12 months.
Analysts say the risk is that unemployment will rise enough to cause consumers to
rein in spending. That would be an additional brake on an economy that has grown
less than 2 percent in each of the last three quarters. The last time that's happened
was during the 1990-1991 recession.
Federal Reserve Chairman Alan Greenspan told lawmakers last week that
weakness in the job market was one of several risks to the economy.
``While most survey measures suggest consumer sentiment have stabilized
recently, softer job markets could induce a further deterioration in confidence and
spending intentions,'' Greenspan said July 24.
Other Details
The Labor Department also said that 45 states and territories reported a decrease
in new claims during the week ended July 21, while seven states and territories
reported a increase.
The insured unemployment rate -- which tends to track the overall jobless rate --
fell to 2.3 percent in the week ended July 21 from 2.4 percent a week earlier. The
number measures the number of people receiving benefits divided by the number
of workers covered by the program.
Data on the total number of unemployed workers continuing to receive benefits
and state-by-state data are reported with a one- week lag.
Some companies are adding workers. Verizon Wireless Inc., the biggest U.S.
mobile-phone operator, announced Tuesday that it plans to add 480 jobs by early
next year and almost 300 more positions in the next few years. Some of those
jobs at will be in customer service at a call center in Pennsylvania and others in the
Midwest. |
