Initial Claims for Unemployment Insurance jumped by 43,000 last week to 474,000. However, last week was revised up by 2,000, so one could see it as a 45,000 increase. This was far worse than the expected level of 400,000.
The trend in initial claims had been downward, though there had been some bumps along the way. Recently, though, they have started to shoot back up again. That is a very worrisome trend. The weekly numbers, after an erratic few months, seemed to have broken decisively to the downside. This week did a lot of damage and makes it hard to see the trend still being in the right direction.
Let us hope the decline resumes next week. I don’t want to get too alarmist about a single data point, but combine it with the weaker-than-expected ADP jobs report, a very soft ISM services number and first quarter growth of just 1.8%, one has to come to the conclusion that the economy is softening significantly over the last month. This is the fourth straight week we have been above the 400,000 level. It is also the highest weekly level since last August.
This is a good read and paints a pretty ugly picture of where things are headed.
Last edited by Jobless_in_Ma on Thu May 05, 2011 2:26 pm; edited 1 time in total
The trend over the last four weeks makes it clear that we are no longer on that Stairway to Heaven, and seem to at least be looking for the entrance ramp to that highway. The increase this week is troubling, as was the fact that it was much worse than forecast.
This series can be volatile from week to week. It is not yet a reason to despair, but it is getting awfully close to being so. If claims continue to climb over the next few weeks it will be.
The continuing and extended claims numbers look much more promising, but only if people are leaving the rolls for the “right reason.” If they are leaving for the wrong reason, that the benefits have simply run out, the declines are not really good news (even if they do help reduce government spending), they are just a reflection of millions of people slipping into poverty. Hardly a thing to celebrate.
This was an ugly report.
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