Unemployment claims stuck above 400,000

by Jen Thu Jun 09, 2011 1:31 pm

Unemployment claims stuck above 400,000

http://money.cnn.com/2011/06/09/news/economy/jobless_claims/index.htm?iid=HP_River

NEW YORK (CNNMoney) -- The number of Americans filing for first-time
unemployment benefits rose again and stayed above the 400,000 mark for
the ninth consecutive week.While a level below 400,000 is
typically associated with payroll growth, claims have now topped this
mark for the last nine weeks.There were 427,000 initial jobless claims filed in the week ended
June 4, the Labor Department said Thursday. That was up 1,000 from the
week before, and slightly worse than the 423,000 claims economists
surveyed by Briefing.com had expected."Jobless claims above
400,000 are consistent with a recession, and they are also consistent
with an economy recovering from a severe recession," said Mark Vitner,
an economist at Wells Fargo. "And now that we're stalling instead of
recovering, that's pretty disconcerting."The four-week moving
average of initial claims, calculated to smooth out volatility, totaled
424,000, down 2,750 from the previous week's revised average of 426,750.
While a slight improvement, the overall trend in the moving average
over recent months has also showed an uptick in unemployment, said
Vitner.
"This really begins to raise some questions of whether there are more
long-term issues in the economy than people are letting on," said
Vitner. "I've been in the camp of no double-dip recession, no huge
slowing in growth, but now I'm a little worried about 2012 -- the
economy just doesn't have a whole lot of momentum right now."The
stubbornly high jobless claims data follows a recent string of other
disappointing reports on the labor market. The government's most closely
watched jobs report, released last Friday, showed that the economy gained only 54,000 jobs in May, down from 232,000 in April. With
less than 3 million job openings in the country today, there are
currently 4.6 unemployed Americans for every job opening, said Vitner. "Companies
are beating revenue targets and saying that they're cutting expenses,
but they aren't hiring," he said. "Uncertainty makes it much harder for
businesses to expand, and right now we have three big issues making
employers cautious: the winding down of QE2 (the Federal Reserve's
economic stimulus plan), the European sovereign debt issue and the U.S.
debt ceiling vote."
Until some of this uncertainty is cleared, unemployed Americans are
in for a rough remainder of the year, with claims likely hovering in a
narrow range, he said. Ongoing claims: Continuing claims
-- which include people filing for the second week of benefits or more
-- edged lower to 3,676,000 in the week ended May 28, the most recent
week available. It was a decline of 71,000 from the week before.Economists were expecting continuing claims to drop to 3,688,000. The four-week moving average for ongoing claims fell by 29,000 to 3,719,250 from the preceding week's revised 3,748,250. State by state:
Jobless claims in only two states fell by more than 1,000 in the week
ended May 28, the latest data available. Claims in California dropped by
1,614, while claims in Wisconsin fell 1,032.Four states saw
filings for unemployment insurance increase more than 1,000. New York
suffered the highest level of first-time filers, with 3,187 claims due
to layoffs in construction, manufacturing and service industries. Oregon
was next, with 1,508 claims.

Sad