Unemployment Claims In U.s. Unexpectedly Climb To Highest In Five Months

[MrFlibble]

http://www.bloomberg.com/news/2010-08-12/jobless-claims-in-u-s-unexpectedly-climb-to-five-month-high.html

More Americans unexpectedly filed applications for unemployment insurance last week, signaling firings stepped up as the economy slowed.

Initial jobless claims rose by 2,000 to 484,000 in the week ended Aug. 7, the highest level since mid February, Labor Department figures showed today in Washington. The number of people receiving unemployment benefits dropped, while those getting supplemental benefits surged by 1.34 million reflecting the government’s extension of eligibility.

Companies may be losing confidence in the recovery and are hesitant to hire, raising the risk of further erosion in consumer spending, the biggest part of the economy. Federal Reserve policy makers this week said growth “is likely to be more modest” than they previously projected, prompting central bankers to take additional steps to spur a rebound.

“The improvement in the labor market is stalling,” Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “The uncertainty in the outlook is going to keep businesses reluctant to hire.”

Economists forecast claims would fall to 465,000, according to the median of 42 projections in a Bloomberg News survey. Estimates ranged from 450,000 to 480,000. The government revised the prior week’s claims figure up to 482,000 from a previously reported 479,000.

Prices of goods imported into the U.S. rose in July for the first time in three months, led by higher fuel costs, another Labor Department report showed today. The 0.2 percent increase in the import-price index was smaller than projected and followed a 1.3 percent June drop. Prices excluding energy fell 0.3 percent.

No Special Factors

There were no special factors influencing last week’s data, a Labor Department spokesman told reporters as the figures were being released.

The four-week moving average of claims climbed to 473,500 from 459,250, today’s report showed.

The number of people continuing to collect unemployment benefits fell by 118,000 to 4.45 million in the week ended July 31, from 4.57 million the prior week.

The continuing claims figure does not include those receiving extended benefits under federal programs. The number of Americans who’ve used up traditional benefits and are now collecting emergency and extended payments soared by 1.34 million to 5.28 million in the week ended July 24. That was the week legislation resuming eligibility went into effect.

Lack of Jobs

While companies have added workers to their payrolls seven straight months, firings have remained elevated as the economic recovery shows signs of slowing. Private firms added 71,000 jobs in July, fewer than economists had forecast, according to government figures released Aug. 6.

CareFusion Corp., the maker of products to reduce hospital infections and monitor medical safety, said Aug. 10 it will cut about 700 jobs as part of a restricting designed to eliminate layers of management and lower costs. The San Diego-based company employs more than 15,000 people, it said this week, and was spun off last year from Cardinal Health Inc.

Congress this week passed legislation providing $26 billion in aid to state governments that is designed to prevent thousands of layoffs of teachers and other public service employees.

State Budgets

Weaker sales and declining income tax revenue have left states with budget gaps totaling $84 billion, according to the National Conference of State Legislatures. Every state except Vermont is required to balance its budget, forcing spending cuts, tax increases or both -- actions Fed Chairman Ben S. Bernanke said last week are contributing to the nation’s sluggish recovery.

The Fed on Aug. 10 held its benchmark interest rate at a record low and announced it will reinvest principal payments on mortgage holdings into long-term Treasury securities, an effort to bolster economic growth.

“The pace of economic recovery is likely to be more modest in the near term than had been anticipated,” the Federal Open Market Committee said in a statement in Washington. “To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level.”

Who would have thought it?

[skomer]

The USA has to create somewhere between 150,000 to 200,000 jobs per month just to stand still.

[General Congreve]

Lapping up the bear food this week. Nothing but good news, if you're cheering on systemic financial collapse that is.

Edited August 12, 2010 by General Congreve

[South Lorne]

Lapping up the bear food this week. Nothing but good news, if you're cheering on systemic financial collapse that is.

...although it will be a fight don't really want systemic financial collapse but do want to see the rigging and fraud within the current system eliminated.....on the road to recovery if that can be achieved....

[Gone baby gone]

Ahhh... Mr Unemployment, I've been expecting you.

<strokes cat>

[zebbedee]

Its funny but I looked at the forcast on forexfactory and thought 'naw, it'll be 20k more than that', damn missed it by 1k through a bit of finger waving in the air. Experts-expert morons more like.

[_w_]

As Mr Geithner said a few days ago:

'Welcome to the recovery!'

[indirectapproach]

And the dollar continues its 5 day strengthening trend against the euro, albeit modestly,

http://finance.yahoo.com/q/bc?s=EURUSD=X+Basic+Chart&t=5d

I think the market is sending us a message, loud and clear.

How about, if the US is farked everyone is farked so you're better off in the US .... ?

Edited August 12, 2010 by indirectapproach