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New US weekly jobless claims jump

Watchman

Alfrescian
Loyal
New US weekly jobless claims jump
Posted: 23 July 2009 2312 hrs

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A job seeker at a US career centre.

WASHINGTON: New claims for US unemployment benefits jumped last week, in line with market expectations, as employers cut payrolls to cope with the severe recession, government data showed on Thursday.

The Labour Department said first-time claims for unemployment insurance benefits rose to a seasonally-adjusted 554,000 in the week ended July 18, after a revised 524,000 in the preceding week.

The average consensus forecast was for 557,000 initial claims.


"It's the third or fourth week of a lot of volatility in our series," a department statistician said.

Over the preceding three weeks, initial jobless claims had fallen by a cumulative total of 106,000.

The department explained that the seasonally-adjusted data was skewed because industrial layoffs that usually occur in early July happened earlier this year with the bankruptcies of auto giants General Motors and Chrysler.

On a four-week moving average, a more reliable indicator of the labour market, the number of new claims filed fell to 566,000 from the previous week's revised 585,000.

With the unemployment rate at 9.5 percent, a 26-year high and expected to go higher, President Barack Obama's administration is under pressure to do more to stimulate the ailing economy which slid into recession in December 2007.

Critics say the 787-billion-dollar stimulus passed in February is making its way too slowly through the economy and has not done enough to stave off rising job losses.

Obama says the unemployment rate could hit the double digits this year as the economy grapples with the brutal recession.

Widely considered a lagging indicator, unemployment is expected to get worse even as the economy begins to stabilise and recover.

Larry Summers, Obama's chief economic adviser, acknowledged recently that the rise in unemployment to a 26-year high "is obviously a major area of concern."

"But contrary to a significant amount of commentary, this does not provide a basis for concluding that the Recovery Act is falling short of its goals," he said.

The Labour Department reported that for the week ended July 11, the insured unemployment rate was 4.7 percent, unchanged from the prior week.

The number of people collecting unemployment insurance benefits dropped to 6.225 million, from a revised 6.313 million.

The four-week moving average to the week ended July 11 also fell, to 6.541 million from a revised 6.674 million. - AFP/de
 
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