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Economy Title: Jobless Claims in U.S. Unexpectedly Climb to Three-Month High Aug. 5 (Bloomberg) -- More Americans than projected filed applications for unemployment insurance last week, indicating employers kept cutting staff as the recovery showed signs of slowing. Initial jobless claims climbed by 19,000 in the week ended July 31, the most since April and exceeding the highest estimate of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The number of people receiving unemployment benefits dropped, while those getting extended payments rose. A cooling economy means employers will resist taking on more staff in coming months, raising the risk consumer spending will weaken further. The jobless rate rose last month as payroll increases weren’t large enough to keep up with gains in the labor force, economists forecast a government report tomorrow will show. “Companies are reluctant to engage in significant hiring,” Ryan Wang, an economist at HSBC Securities USA Inc. in New York, said before the report. “Companies are taking ontemporary workers and there is still reluctance to hire permanent workers.” Economists forecast claims would fall to 455,000, according to the median of 43 projections. Estimates ranged from 444,000 to 470,000. The government revised the prior week’s total to 460,000 from a previously reported 457,000. No Special Factors There were no special factors influencing last week’s report, a Labor Department spokesman said in a press conference. The timing of auto plant retooling shutdowns, which caused claims to gyrate last month, are probably no longer affecting the data, he said. The four-week moving average of claims, a less-volatile measure, increased to 458,500 last week from 453,250, today’s report showed. The number of people continuing to collect unemployment benefits dropped by 34,000 to 4.54 million in the week ended July 24 from 4.57 million the prior week. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. Those who’ve used up traditional benefits and are now collecting emergency and extended payments increased by about 258,000 to 3.92 million in the week ended July 17. President Barack Obama on July 22 signed into law a measure restoring unemployment benefits that were cut off. The bill provides retroactive aid to those whose checks were cut off when benefits expired June 2, while extending through November a program offering up to 99 weeks of assistance. Jobless Rate The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.6 percent in the week ended July 24. Forty-five states and territories reported a decrease in claims during that period, while eight reported an increase. Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates. That relationship has broken down in recent months as some companies continue to cut staff, while others expand, pointing to an uneven recovery. The economy generated 90,000 private jobs in July, according to the median forecast of economists surveyed before tomorrow’s jobs report from the Labor Department. Total payrolls probably fell by 65,000, reflecting the dismissal of temporary government workers as the decennial census wound down. Federal Reserve Chairman Ben S. Bernanke on Aug. 2 said rising wages will probably spur household spending in the next few quarters. Bernanke’s Outlook While the U.S. has “a considerable way to go” for a full recovery, “rising demand from households and businesses should help sustain growth,” Bernanke said in a speech in Charleston, South Carolina. “The slow recovery in the labor market and the attendant uncertainty about job prospects are weighing on household confidence and spending,” he said. United Technologies Corp. said July 26 it expects restructuring actions from the first half of the year to result in job cuts of about 2,400 hourly and salaried employees. The maker of Carrier, Pratt & Whitney and Sikorsky products, had eliminated 900 jobs as of June 30 and is targeting most of the rest of the reductions for 2010 and 2011. The U.S. auto makers are hiring after last year’s bailouts and restructurings. Ford Motor Co., the second-largest U.S. automaker, plans to add 27 percent more UAW positions at its U.S. plants than originally planned, citing flexible labor contracts that reduced the cost of employing union members. Ford Hiring Ford has agreed to add 1,975 jobs, 416 more than originally agreed to, by 2012 to do work traditionally done by suppliers. The jobs at nine U.S. plants will be filled by a mix of idled current Ford workers and new hires, Jennifer Flake, a spokeswoman, said yesterday in an interview. Obama today will announce a $250 million loan guarantee to finance Ford exports, according to a White House statement. The president will tour an automobile factory in Chicago, where Dearborn, Michigan-based Ford, the only Big 3 U.S. automaker that didn’t take bailout money, will begin assembling the new 2011 Explorer later this year.
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Less noticed but important stat. People are finding jobs. Just not enough to tip the scale yet.
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