Friday, 31 July 2009

First-time Unemployment Claims Up

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UnemploymentFirst-time unemployment claims continue to increase at a faster pace than expected. “The Labor Department said the number of claims in the week ending July 25 rose by 25,000 from an upwardly revised figure the previous week,” the Agence France Press reported July 30.

“However,” the AFP reported, “the four-week moving average — sometimes seen as a more reliable indicator of trends — fell by 8,250 from the prior week to 559,000.” Some saw the four-week average as something of a trend toward more limited increases in layoffs.

FoxNews.com reported other encouraging news: “The number of people remaining on the jobless benefit rolls, meanwhile, fell to 6.2 million from 6.25 million, the lowest level since mid-April.” The Obama administration has already spun the new figures in talking points, claiming the economy has turned a corner and that unemployment figures typically lag behind an economic recovery by more than a year. Obama had announced earlier in the week that upcoming economic data could be “the beginning of the end of the recession.”

But Obama has also hedged his bets in case the economy hasn’t yet hit the floor of the recession. “I don’t have a crystal ball and I haven’t received the figures yet,” President Obama told reporters Thursday from the Oval Office. Indeed he next added a comment that indicated the recession was deepening: “I suspect that the GDP numbers will still show that the economy contracted in the 2nd quarter.” Updated GDP numbers are expected July 31, and Bloomberg News surveyed 78 economists and predicted that “the U.S. economy probably shrank at a slower pace in the second quarter, a sign the worst recession in half a century is winding down, economists said before a report today. Gross domestic product contracted at a 1.5 percent annual rate from April to June after dropping 5.5 percent the prior quarter.”

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