The number of people who filed new applications for jobless benefits leaped 43,000 last week to 474,000, the highest level in almost nine months. A Labor official attributed much of the increase to temporary layoffs in the auto sector and in the state of New York, where workers in the educational field such as bus drivers are eligible for compensation during the week of spring break. Economists surveyed by MarketWatch had expected claims to fall to seasonally adjusted 412,000 from the prior week's revised level of 431,000. The average of new claims over the past four weeks, meanwhile, climbed by 22,250 to 431,250, the highest level since November. The four-week average is considered more accurate a gauge of employment trends because it lessens week-to-week volatility in the data. Also, the government said the number of workers who continue to receive state compensation increased by 74,000 to a seasonally adjusted 3.73 million in the week of April 23. Altogether, 8.01 million people received some kind of state or federal benefit in the week of April 16, down 171,547 from the prior weekThis is clearly a major move in the wrong direction. More importantly, a jump like this is a signal of a huge slowdown coming. In short -- not good, not good at all.
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In all likelihood most of this jump was likely seasonal and/or temporary issues as cited but there has still been about a 15-20k rise in the last month or so. This has also scared the commodity markets into a big selloff so that is a positive.
Seriously, Anonymous? temporary issues that are seasonal? Then why the heck is it a surprise to economists?
Fail.
@Hal
Did you even read the article? "A Labor official attributed much of the increase to temporary layoffs in the auto sector and in the state of New York" this one also doesn't mention the new emergency benefits going into effect in Oregon and the storms in the South.
For more info read here: http://www.bloomberg.com/news/2011-05-05/jobless-claims-in-u-s-unexpectedly-jump-due-to-special-factors.html
Definitely not good news. Also a pattern now has been established of unemployment claims significantly trending upward. Most probably, the economy at the very least was significantly slowing down last month or even contracted. The question is whether this pattern will continue. If so, a recession began last month. To make matters worse, steep budget cuts for the next two years will slow the economy even further, and the Fed is going to start raising interest rates again.
On the bright side, the killing of Obama could give Americans a morale boost and we could see consumption spending go temporarily back up. Most economists would reject the idea of irrationality in the marketplace. However, I believe this is where economists has it wrong.
Tommorrow's employment report is going to be interesting. I'm not sure whether we will see a rise in the unemployment rate as the last two weeks of March will be included in the report, but not the last two weeks of April. But almost certainly, the next months report we will see a significant increase in the unemployment rate. My guess, unemployment rose to 8.9% in March, and next month's report will see a 9.2% rate.
esong, unfortunate typo in your post.
I have read in several sources today that various Spring breaks had a major impact on initial claims the past couple of weeks. Many people, such as bus drivers, are eligible for unemployment during Spring break. I believe it was 25k in New York alone.
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