NEW YORK (CNNMoney.com) -- Jobless claims rose to their highest level in five years last week, the latest evidence that Americans are still having a hard time finding a job.
The Department of Labor reported Thursday initial filings for state jobless benefits increased by a seasonally adjusted 44,000 to 448,000 in the week ended July 26.
Unemployment claims rose much more than had been expected. The consensus estimate of economists surveyed by Briefing.com was for claims to come in at 395,000.
Last week marked the highest total for weekly jobless claims since the week ending April 19, 2003. It was the highest week-to-week increase in jobless claims since the week ending September 10, 2005.
That rise sent the four-week moving average of new jobless claims up 11,000 to 393,000.
The weekly jobless claims report also showed continued unemployment insurance claims from those already receiving benefits rose in the week ended July 19 to 3.28 million, up 185,000 from the previous week.
The four-week moving average for continued claims rose by 42,750 to 3.17 million.
The rise in new unemployment claims was sharp, but this tends to be a choppy time for claims. On a non-seasonally adjusted basis, initial claims actually fell for the second straight week.
"It's summer, when initial claims are traditionally very volatile," said Adam York, an economist with Wachovia.
Furthermore, President Bush signed a bill last month that extends unemployment benefits to as much as 13 weeks for some. In an effort to notify hundreds of thousands of Americans about the extension, the Labor Department discovered many were eligible for initial unemployment claims - not just an extension of benefits.
The Labor Department said some of these people had intervening wages such as a temporary summer job that qualified them to reapply for jobless insurance benefits. As a result, the government said many valid claimants who did not previously know they were eligible applied for new benefits.
That makes the number a bit difficult to compare to previous weeks.
"Nevertheless, these numbers are clearly very weak," York added. "We're not in a situation that we can't dig ourselves out of, but we're not going to rebound very quickly either."
The latest claims reading comes on the heels of a report out Wednesday that showed the private sector unexpectedly added 9,000 jobs in July. The ADP employment report had been forecast to show a large decline.
Both the weekly jobless claims report and the ADP payrolls survey come ahead of the more closely watched employment report from the Labor Department, which is due out Friday. The report is expected to show that employers cut jobs for a seventh straight month. The unemployment rate is expected to rise to 5.6%.
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