Jobless claims jump higher than expected
By Ariana Eunjung Cha
The number of Americans filing jobless claims jumped higher than expected last week, underscoring worries about the economic recovery in the second half of the year.
The Labor Department said initial claims for unemployment benefits, which reflect firings by businesses, rose by 37,000 to 464,000 in the week ending on July 17. Economists surveyed by Bloomberg projected that claims would only hit 445,000 while those surveyed by Dow Jones had expected 448,000.
Many analysts had expected the jobless claim numbers to reverse declines earlier in the summer because of seasonal issues such as factories shutting down for maintenance. But last week's increase shows that there may be more challenges to the labor market.
Historically, jobless claims fall as jobs grow but in recent months that hasn't been the case as some companies have reduced staff while others have expanded in an uneven recovery.
New Jersey-based Johnson & Johnson, for instance, said in July it would cut 300 positions from a factory where children's medicines were made. But other companies such as Apple, which last week announced that its profits hit a record high thanks to the successful rollout of its iPad and iPhone mobile devices, are adding to their payrolls.
Federal Reserve Chairman Ben S. Bernanke expressed worry about the jobs situation in testimony before Congress Wednesday, saying it will likely take a "significant amount of time" to bring back the roughly 8.5 million jobs lost in 2008 and 2009. After hitting a 26-year high of 10.1 percent in October 2009, the unemployment rate fell to 9.5 percent in June. But millions remain without work.
On Wednesday, the Senate approved the hotly debated extension of unemployment benefits for 2.5 million people whose benefits expired. The House is scheduled to vote on the bill Thursday.
The largest increases in initial claims for the week ending July 10 were in New York (18,047) due to layoffs in the transportation, service and public administration industries and Indiana (9,094) due to layoffs in the automotive and service industries. The largest decreases were in New Jersey (-10,585) because of fewer reductions in transportation, warehousing and services and California (-8,034) because of shorter workweeks as well as fewer layoffs in the service industry, the Labor Department said.
Ariana Eunjung Cha
July 22, 2010; 9:09 AM ET
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