Fewer jobless benefits sought, but many still jobless
Frank Wallace who has been unemployed since May 2009 attends a rally Wednesday in Philadelphia. Initial claims for jobless benefits fell by the most in two months last week, but the number of unemployed remain above levels consistent with healthy job growth. (June 23, 2010) Credit: AP
WASHINGTON - Initial claims for jobless benefits fell by the largest number in two months last week, but remain above levels consistent with healthy job growth.
Despite the drop of 19,000, claims are at about the same level they were at the beginning of the year. The stubbornly high level of requests for jobless aid is a sign hiring remains weak even as the economy recovers.
The Labor Department said Thursday that new claims dropped to a seasonally adjusted 457,000. That's slightly below economists' forecasts of 460,000, according to Thomson Reuters.
First-time requests for unemployment insurance have been stuck at about 450,000 since the beginning of this year. New claims dropped steadily last year after reaching a peak of 651,000 in March 2009. Claims need to fall closer to 425,000 to signal sustained job growth, many economists say.
The four-week average dipped by 1,500 to 462,750, the first drop in six weeks.
The report comes as worries grow about the health of the economic recovery. New home sales dropped in May to their lowest level on records dating from 1963, the Commerce Department said Wednesday. That followed a report earlier in the week that sales of previously owned homes also fell last month, as tax credits for home buyers expired April 30.
The total number of people receiving benefits, meanwhile, dropped by 45,000 to 4.5 million, the department said. But that doesn't include about 5.3 million people who received extended benefits paid for by the federal government in the week ended June 5, the latest data available.
During the recession, Congress added up to 73 weeks of extra benefits on top of the 26 weeks typically provided by states.
But those extensions expired earlier this month, leaving about 900,000 people without unemployment insurance, according to the Labor Department. That figure is expected to grow to 1.25 million by the end of this week.
The House approved legislation to restore the 73 extra weeks but the Senate is still debating the bill.
