GOOD NEWS: Jobless claims drop by 52,000

From the Chicago Tribune | July 10, 2009

The number of newly laid-off workers filing initial claims for jobless benefits last week fell to the lowest level since early January, largely because of changes in the timing of auto industry layoffs.

Continuing claims, meanwhile, jumped to their highest level on record. Although layoffs are slowing, jobs remain scarce and the unemployment rate is rising, which some economists worry could weaken or delay a recovery.

New claims for unemployment insurance plummeted by 52,000, to a seasonally adjusted 565,000, the Labor Department said Thursday. That was below analysts' expectations of 605,000, according to Thomson Reuters. The last time new claims were below 600,000 was the week of Jan. 24.

"This is not as positive as it looks," Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. "There are a number of special factors at play here, including the fact that the holiday-shortened week skewed the data."

Continuing claims jumped 159,000, to 6.88 million, the highest on records dating from 1967.

Continuing claims had fallen in two of the previous three weeks. The data lag initial claims by a week.

Separately, the Commerce Department said wholesale inventories dipped 0.8 percent in May, slightly less than the 1 percent decline economists expected. Sales at the wholesale level rose 0.2 percent, better than the expected flat reading.