Jobless claims might be misleading

WASHINGTON --- The number of people on the jobless rolls is down by a fraction, but those figures could be deceiving: Economists expect the unemployment rate to rise again today, and jobs should be scarce for months to come.


The total number of people on unemployment aid fell slightly for the first time in 20 weeks, down about 15,000 to 6.7 million, the Labor Department said Thursday. It was the first drop in that figure since early January.

First-time jobless claims also dipped to a seasonally adjusted 621,000.

While it might be a sign businesses are starting to hire again, some economists say the lower numbers could simply mean people out of work are using up their benefits.

Productivity is also up among U.S. workers, according to another report out Thursday -- but only because companies are forced to produce more with fewer workers. That means they will probably delay hiring even after the economy begins growing again.

And an influx of new college graduates could push unemployment even higher over the summer because many will fail to find work.

"We don't think the jobless rate is close to peaking yet," economists at Wrightson ICAP wrote in a note to clients. They did say they expected the increase to be slower.

Analysts forecast the unemployment rate will rise to 9.2 percent when the government releases its May jobs report today. Many economists expect it to top 10 percent by year's end and to keep rising into next year.

Economists expect the report to show employers cut 520,000 jobs last month -- huge by historical measures but far fewer than the average of 700,000 a month for the first quarter of this year.

Pierre Ellis, the senior economist at Decision Economics, said the decline in the number of people receiving unemployment aid might mean some businesses are starting to hire. He projects today's employment report will show a smaller loss of just 450,000 jobs.

Other economists say that if fewer people are receiving unemployment aid, it could signal some are simply using up their benefits, rather than finding a new job.

"Businesses have shown no proclivity to hire anybody," said Mark Vitner, the senior economist at Wachovia.

The number of people claiming jobless aid through an extended benefits program rose by about 160,000 to 2.35 million for the week that ended May 16, the Labor Department said. That figure, which lags behind the figures for initial claims by two weeks, brings the total number of people claiming benefits to more than 9 million.

The emergency extension program, approved by Congress last June, adds up to 33 extra weeks of benefits on top of the 26 weeks provided by most states.


Sat, 08/19/2017 - 17:34

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