Ini­tial claims for job­less aid rise un­ex­pect­edly

Los Angeles Times - - Daily Market Roundup - as­so­ci­ated press

Ap­pli­ca­tions for un­em­ploy­ment ben­e­fits in­creased last week for the first time in five weeks.

Ini­tial claims for job­less aid rose by 12,000 to a sea­son­ally ad­justed 465,000, the La­bor Depart­ment said Thurs­day. Many econ­o­mists had ex­pected a flat read­ing or small drop.

The rise sug­gests that jobs re­main scarce and some com­pa­nies are still cut­ting work­ers amid weak eco­nomic growth. Ini­tial claims have fallen from a re­cent spike above a half-mil­lion last month. But they have been stuck above 450,000 for most of this year.

“What’s be­com­ing in­creas­ingly clear is that this isn’t a nor­mal re­cov­ery,” said Dan Green­haus, chief eco­nomic strate­gist at Miller Tabak. “There’s lit­tle we can do to cre­ate jobs un­til de­mand re­turns, and de­mand isn’t re­turn­ing.”

Sep­a­rately, the Con­fer­ence Board, a pri­vate re­search group, said its in­dex of lead­ing eco­nomic in­di­ca­tors rose mod­estly in Au­gust, more ev­i­dence that the econ­omy will keep grow­ing at a slow pace through the fall.

Job­less claims typ­i­cally drop be­low 400,000 when hir­ing is ro­bust and the econ­omy is grow­ing.

The four-week av­er­age of claims, a less volatile mea­sure, de­clined 3,250 to 463,250. That’s the low­est level since the end of July, but down only 4,000 since Jan­uary.

Ini­tial claims, while volatile, are con­sid­ered a re­al­time snap­shot of the job mar­ket. The weekly claims fig­ures are con­sid­ered a mea­sure of the pace of lay­offs and an in­di­ca­tion of com­pa­nies’ will­ing­ness to hire.

New re­quests for job­less ben­e­fits have fallen sharply since June 2009, the month the re­ces­sion ended. They topped 600,000 at the end of that month. But most of the de­cline took place last year.

Eco­nomic growth has slowed con­sid­er­ably in re­cent months, and many em­ploy­ers are re­luc­tant to add new em­ploy­ees. The econ­omy grew at a 1.6% an­nual rate in the sec­ond quar­ter, an ane­mic pace that isn’t fast enough to re­duce the job­less rate, now at 9.6% na­tion­ally. Growth in the cur­rent July-Septem­ber quar­ter isn’t ex­pected to be much faster.

Al­though lay­offs have eased since the re­ces­sion ended, hir­ing hasn’t picked up much. Busi­nesses added only a net 67,000 jobs in Au­gust. The Fed­eral Re­serve Bank of San Fran­cisco es­ti­mated this month that the econ­omy would need to gen­er­ate as many as 300,000 net jobs ev­ery month to re­duce the un­em­ploy­ment rate to 8% over the next two years.

The num­ber of peo­ple con­tin­u­ing to re­ceive un­em­ploy­ment ben­e­fits fell 48,000 to 4.49 mil­lion, the La­bor Depart­ment said. But that doesn’t in­clude sev­eral mil­lion peo­ple who are re­ceiv­ing job­less aid un­der ex­tended pro­grams ap­proved by Congress dur­ing the re­ces­sion.

The ex­tended ben­e­fit rolls rose about 200,000 to nearly 5.2 mil­lion in the week ended Sept. 4, the lat­est data avail­able.

Some com­pa­nies are still cut­ting jobs. Cessna Air­craft Co. said Tues­day that it would lay off 700 work­ers.

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