More Bad News My Friends: New jobless claims jump unexpectedly to 627,000; continuing claims rise to 6.74 million

From the Washington Examiner

By: CHRISTOPHER S. RUGABER



Associated Press


06/25/09 1:30 PM EDT

WASHINGTON

- The number of Americans filing new jobless claims jumped unexpectedly
last week, and the total unemployment benefit rolls rose to more than
6.7 million.

The Labor Department data released Thursday show
jobs remain scarce even as the economy shows some signs of recovering
from the longest recession since World War II.

The department
said initial claims for jobless benefits rose last week by 15,000 to a
seasonally adjusted 627,000. Economists expected a drop to 600,000,
according to Thomson Reuters.

Several states reported more claims
than expected from teachers, cafeteria workers and other school
employees, a department analyst said.

The number of people
continuing to receive unemployment insurance rose by 29,000 to 6.74
million, slightly above analysts' estimates of 6.7 million.

The four-week average of claims, which smooths out fluctuations, was largely unchanged, at 616,750.

Economists
expect the number of initial unemployment insurance claims, which
reflects the level of layoffs, to slowly decline over the coming months
as the economy bottoms out.

Still, claims remain far above levels associated with a healthy economy. A year ago they were 392,000.

Economists
say any recovery is likely to be weak, and the unemployment rate,
currently at 9.4 percent, is expected to top 10 percent by the end of
this year.

Millions of Americans also are receiving jobless
benefits through a federal extension enacted by Congress last year. For
the week ending June 6, more than 2.4 million people received benefits
under the extension, which adds 20 to 33 weeks on top of the 26 weeks
typically provided by states.

About 288,000 people also are
receiving benefits under state emergency programs, bringing the total
jobless benefit rolls to nearly 8.8 million that week. The extended
benefits data lags initial claims by two weeks.

Other recent
reports indicate the economy could be bottoming. The Commerce
Department said Wednesday that orders to factories for durable goods
such as computers, machinery and aircraft increased 1.8 percent in May,
much better than analysts expected.

But sales of new homes fell
0.6 percent last month, the government said, as the housing sector
remains weak. Analysts had expected an increase in sales.

The
Federal Reserve said Wednesday that the recession is easing, though the
economy will remain weak enough to keep inflation in check. Fed
Chairman Ben Bernanke has said the economy will begin to recover by the
end of this year.

Companies have cut a net total of 6 million jobs since the downturn began in an effort to reduce costs.

Still,
job cuts are slowing. Employers eliminated 345,000 positions in May,
about half the monthly average of jobs lost in the first quarter.

Troubles
in the automotive sector also may cause unexpected fluctuations in the
claims. General Motors Corp. filed for bankruptcy protection June 1,
joining Chrysler LLC, which filed April 30.

Companies are still
shedding jobs. Monsanto Co., the world's biggest seed maker, said
Wednesday that it will lay off about 900 workers, or about 4 percent of
its work force, as its third-quarter profit fell 14 percent.