Applications for unemployment benefits in the U.S. unexpectedly increased last week to the highest level since November, showing companies are stepping up the pace of firings as the economy slows.
Initial jobless claims rose by 12,000 to 500,000 in the week ended Aug. 14, Labor Department figures showed today in Washington. Claims exceeded all estimates of economists surveyed by Bloomberg News and compared with the median forecast of 478,000. The number of people receiving unemployment insurance fell, while those getting extended benefits increased.
A cooling economy may be discouraging employers from adding staff and prompting some to step up dismissals, raising the risk consumer spending will weaken more. The Federal Reserve said last week that the recovery would probably be “more modest” than anticipated, reflecting in part a jobless rate that’s restraining incomes.
“We’re seeing a renewed pickup in layoffs,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “If firms aren’t hiring it’s probably because they’re not producing. Demand will slow in the third quarter.”
Stock-index futures fell after the report, erasing earlier gains. Futures on the Standard & Poor’s 500 Index expiring next month dropped 0.3 percent to 1,083.6 at 8:43 a.m. in New York.
Estimates of the 42 economists surveyed by Bloomberg ranged from 460,000 to 495,000. The government revised the prior week’s claims figure to 488,000 from a previously reported 484,000. Initial filings last week were the highest since the week ended Nov. 14, 2009.
Four of Last Five
There were no special factors influencing last week’s data, a Labor Department spokesman told reporters as the figures were being released. Claims have increased in four of the last five weeks.
The figures correspond with the week the Labor Department surveys companies to compile the monthly employment data.
The four-week moving average of claims increased to 482,500 last week, the highest level since the week ended Dec. 5, 2009, from 474,500.
The number of people continuing to collect unemployment benefits dropped by 13,000 to 4.48 million in the week ended Aug. 7, from 4.49 million the prior week.
The continuing claims figure does not include those receiving extended benefits under federal programs. The number of Americans who’ve used up traditional benefits and are now collecting emergency and extended payments rose by 309,334 million to 5.59 million in the week ended July 31. That was the week after legislation resuming eligibility went into effect.
Unemployment Rate
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.5 percent in the week ended Aug. 7.
Forty states and territories reported an increase in claims that same week, while 13 reported a decrease.
While companies have boosted payrolls seven straight months, firings have remained elevated as the economic recovery shows signs of slowing. Private firms added 71,000 jobs in July, fewer than economists had forecast, according to government figures released Aug. 6. Unemployment held at 9.5 percent, near a 26-year high of 10.1 percent.
More than a year after the economy began expanding following the worst recession since the 1930s, employers are slow to hire. That’s limiting consumer spending, which accounts for about 70 percent of the economy.
Shutting Lines
A Schott AG unit shut one of two production lines at a New Mexico plant that makes solar-power equipment and trimmed the jobs of 30 of the factory’s temporary workers because of slow U.S. sales.
The line has been “temporarily suspended,” Michael Jacquorie, chief operating officer at Schott Solar’s Albuquerque, New Mexico, operations, said last week in a telephone interview.
Bob Evans Farms Inc., a restaurant operator and sausage maker, said Aug. 9 it is closing a pork plant in Galva, Illinois, because of shrinking supplies of U.S. hogs. About 70 workers will lose their jobs.
“Our business model needs to adapt to these tough market conditions,” Mike Townsley, the president of Columbus, Ohio- based Bob Evans Food Products, said in a statement. “We need to manage our assets to stay competitive long term.”
A survey released yesterday also showed companies expect their costs of health-care benefits to rise 8.9 percent next year, a product of the overhaul signed into law by President Barack Obama.
About 63 percent of businesses plan to make employees pay a higher percentage of their premium costs in 2011, said the Washington-based National Business Group on Health, which surveyed 72 companies that employ more than 3.7 million people. The survey showed 46 percent plan to raise the maximum level of out-of-pocket costs that workers must bear.
My brother in law has been given the choice to retire or be let go. He has worked for the same place for the last 36 years. Its been my dream to go work there for years. Who would ever have thought that NASA would be passing out pink slips.
My brother in law has been given the choice to retire or be let go. He has worked for the same place for the last 36 years. Its been my dream to go work there for years. Who would ever have thought that NASA would be passing out pink slips.
They have 45 days to use his insurance then they are on their own. Going from putting men in space to government insurance and social security. Honestly I don't know what kind of retirement plan they have, they may be in better shape then we will be next year.
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10:13 AM
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
"There is a hole in the bucket dear Liza, dear Liza. A hole in the bucket dear Liza, a hole Well fix it dear president, dear president". Well the older guys get the picture.
My brother in law has been given the choice to retire or be let go. He has worked for the same place for the last 36 years. Its been my dream to go work there for years. Who would ever have thought that NASA would be passing out pink slips.
Exactly that happened to me in March at age 54. Learning to live on 1/3 of what I made when working.
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11:28 AM
PFF
System Bot
Formula88 Member
Posts: 53788 From: Raleigh NC Registered: Jan 2001
My brother in law has been given the choice to retire or be let go. He has worked for the same place for the last 36 years. Its been my dream to go work there for years. Who would ever have thought that NASA would be passing out pink slips.
That happened at least twice the last time there was a Democrat in the Oval Office. I know of two RIFs at KSC during Clinton's tenure. It's also why I no longer work for NASA. (TV-MSD from 1992-96)
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12:33 PM
Pyrthian Member
Posts: 29569 From: Detroit, MI Registered: Jul 2002
I guess that's what ya could call it, when virtually a single sector/geographical region/voting block is supported by all the rest of us instead of themselves.
