Initial Jobless Claims Hit a 5-Week High

Jobless claims laid offBy CHRISTOPHER S. RUGABER

WASHINGTON -- The number of Americans seeking unemployment benefits rose last week to a five-week high, evidence that the job market remains sluggish.

The Labor Department said Thursday that weekly applications for unemployment aid rose 10,000 to a seasonally adjusted 383,000. The four-week average, a less volatile measure, increased for the first time in a month to 374,500.

Economists were disappointed by the data, particularly when coupled with a separate report Thursday that showed only modest hiring by private businesses in May. On Friday, the government will report on May hiring by private and public employers.

"The jobs data were not reassuring ahead of tomorrow's ... report," said Jennifer Lee, an economist at BMO Capital Markets.

Applications had declined to roughly 370,000 for four weeks. That drop suggested that hiring could pick up in May. When applications drop below 375,000, it typically suggests that hiring is strong enough to reduce the unemployment rate.

Thursday's data doesn't figure into the May employment report, to be released Friday. That report is based on figures gathered in the middle of the month. Analysts expect it will show that employers added 158,000 jobs, while the unemployment rate remained 8.1%.

That would be an improvement from April, when employers added only 115,000 jobs. But it would be slower than the blistering pace set this winter, when the economy generated an average of 252,000 jobs a month from December-February.

The number of people receiving benefits fell, partly because extended benefits programs are ending in many states. About 6.1 million people received benefits in the week that ended May 12. That's down 30,750 from the previous week.

Separately, a private survey showed that businesses boosted hiring only slightly in May. Payroll provider ADP says businesses added 133,000 jobs. That's slightly better than the revised total of 113,000 jobs it reported for April, which was the weakest in seven months. The report covers only hiring in the private sector; it excludes government jobs.

The unemployment rate has fallen from 9.1% in August to 8.1% last month. Part of the reason for the drop is that employers added 1.5 million jobs during that time. But it has also declined because some people gave up looking for work. The government counts people as unemployed only if they're actively looking for a job.

Economists have cautioned that a warm winter led companies to move up some hiring and accelerate other activity that normally wouldn't occur until spring. That gave the appearance that the economy had strengthened in January and February and weakened in early spring.

Recent economic indicators, meanwhile, have been mixed.

Consumer confidence fell sharply in May to its lowest level since January, the Conference Board said Tuesday. Americans were more worried about jobs, housing and the stock market. Lower confidence could lead consumers to cut back on their spending.

But that survey contrasted with a report, released Friday, by Thomson Reuters/University of Michigan that found consumer sentiment rose to its highest level in four and a half years.

Economists said the difference between the two is partly explained by timing. The Conference Board's survey was completed by May 16, just before stock prices leveled off after falling steadily. Gas prices also fell further after the survey was completed. The University of Michigan's report continued until later in the month and would have captured both of those trends.

There are signs the housing market is slowly improving. Home prices rose in March from the previous month in most major U.S. cities for the first time in seven months, according to the Standard & Poor's/Case-Shiller home price index. Prices rose in 12 of the 20 cities it tracks. Some of the increase was due to the start of the spring home selling season. The month-to-month price changes aren't seasonally adjusted.

In April, sales of both previously occupied homes and new homes rose near two-year highs. Builders are gaining more confidence in the market as traffic from potential buyers rises, according to an industry survey.

Building permits have risen in recent months, though they fell in April from nearly a two-year high, the National Association of Realtors said Wednesday.

Long-term mortgage rates have never been lower. The average rate on the 30-year fixed mortgage fell to 3.78% last week, the lowest since long-term rates began in the 1950s.

Still, the pace of home sales remains well below healthy levels. Economists say it could be years before the market is fully healed.

Increase your money and finance knowledge from home

Building Credit from Scratch

Start building

View Course »

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

time to fly the flag upsidedown

June 01 2012 at 11:00 AM Report abuse +1 rate up rate down Reply
1 reply to tallonplumb's comment

Tell that to your congressman. They haven't done squat si9nce elected in 2010. Remember the jobs bills they were gonna focus on? Nope, none that I can see. They passed not a one. None, Nada, Zero!

June 01 2012 at 11:48 AM Report abuse -1 rate up rate down Reply
1 reply to chris1011's comment

Tell that to Obama. He said unemployment would not go past 8%. And it was the democrats in the senate that blocked Obamas save his own job bill Chrissy. Obamites don't like to acknowledge that.

Obamas a fiasco

June 01 2012 at 2:29 PM Report abuse +1 rate up rate down

How about an update on todays job report and what it is doing to the market, huff puff (obama pimp).

June 01 2012 at 9:52 AM Report abuse +1 rate up rate down Reply
Robert & Lisa

We can tell the President is fighting hard for the poor. He's made more people poor than any President in History. 20 million more have slipped below the poverty level since he took office, yet him and his hypocritical rich friends have all prospered since he took office. How is that? They are big bunch of deceivers!

June 01 2012 at 9:13 AM Report abuse rate up rate down Reply
1 reply to Robert & Lisa's comment

I thought Boehner and his new republican majority were gonna pull out all the stops and come up with some jobs. That's what they ran on - they were gonna laser focus on jobs. Instead we got uterus ultrasound bills and deny gay rights bills and women's womb bills and marriage bills out the wazoo. No jobs bills from congress. In fact, they have done zero since elected in 2010. Their approval rating? How about 9%!

June 01 2012 at 11:46 AM Report abuse -2 rate up rate down Reply
1 reply to chris1011's comment

Obama said he had everything under control. he said unemployment would not go above 8%. the senate democrats blocked his save his own job bill last year.

9% that was Pelosi's approval rating when she was speaker. And if the approval for congress is at 9% now that's because of the democrooks that are still there.

Funny how not one democrat vvoted for Obama's budget. LMAO!!!! ZEROOOOOOOOOOO NADA!!!!!

June 01 2012 at 2:33 PM Report abuse +1 rate up rate down
Robert & Lisa

Anyone who thinks this recession is over is not facing reality.

June 01 2012 at 9:08 AM Report abuse rate up rate down Reply

Democrat spin is entertaining! Hiring at 250,000 per month for a few months was "blistering pace". LOL! Even then people were losing their jobs at about 350,000 per month! The Obama economy is tanking.

They claim the unemployment rate is "falling", which is false. As hundreds of thousands lose their unemployment insurance benefits (now at an accelerated rate) they are no longer counted as "unemployed", so the "unemployment rate" magically drops.

June 01 2012 at 4:51 AM Report abuse +2 rate up rate down Reply

I feel for the people still out looking for a traditional job. I did for two years and had the mindset that I HAVE to work in an office and I HAVE to have a traditional job. Not so. I got tired of being broke and struggling and finally started answering ads for part time jobs in my field, even if they were only 5 hours a week. Then I figured I could make a living dong this on my own and I did and I have. For a year now. Took me awhile to get my business up to where I could fully replace my old traditional job but now I am looking at an 80 K year income and love it. I work from home other than 2 days a week when I work in house with a client from 11 - 5. The rest of the time I am out visiting my other clients and making my weekly visits to pick up paperwork to do from my home. 54 years old and I never plan on punching a clock for someone else ever. Think outside the box. Get 3 part time jobs in your filed if you can. They are out there. Just have to change your thinking. If someone tells me that 20 hours a week won't pay the bills I say well neither will ZERO hours a week. It's better than nothing

May 31 2012 at 11:56 PM Report abuse +3 rate up rate down Reply

The problem is that the jobs keep flowing out of the country...never to return...or being replaced by minimum wage jobs...

Bank of America... Remember that "too big to fail" bank that we gave billions to bail out ?? They are now closing down their call centers and sending them to the Phillipines... That's 6000 jobs right there... That's not counting the millions (yes, millions !) of jobs that already flowed out of this country when manufacturing plants closed so that companies could pay third world wages and made more money...

Poor Obama keeps trying to stick his fingers in the jobs dike...and corporations keep sending them overseas... And the Republicans have now convinced you little serfs that there is nothing that can be done about it... Keep believing it...and one of these days you'll be settling for $7 an hour...and still blaming Obama...

May 31 2012 at 11:51 PM Report abuse +2 rate up rate down Reply

If by chance O does get re-elected, I wonder who he will blame in his second term for his continued failures? Maybe it's time he look in a mirror?

May 31 2012 at 11:23 PM Report abuse +2 rate up rate down Reply

The locals news just stated some companies are hiring such as CoinStar and Bob Evans. Really great jobs if you ask me if you want to be a vending machine operator or bus tables and wash dishes. Thanks O for that change you mentioned. I would have never thought it meant getting a job at CoinStar to COUNT CHANGE.

May 31 2012 at 11:20 PM Report abuse +1 rate up rate down Reply

Not buying it I am sick of the media blowing things up! with negative The economy is picking up and jobless claims are down Hows that!

May 31 2012 at 10:38 PM Report abuse -1 rate up rate down Reply
1 reply to Puppino's comment

You can buy anything you want. When the unemployment rate was at 10 percent what did you think? They were all lying to make Obozo look bad? Are all the empty homes due to foreclosure lies too? Jeez.

May 31 2012 at 11:57 PM Report abuse +1 rate up rate down Reply