Jobless benefits claims jumped to 500,000, an increase of 12,000 in one week, the highest since November 2009, worrying economists and journalists that the U.S. job market may be worsening. Forecasters had expected the number of claims to drop rather than continue to increase. Here's what we can learn from the bad news.
- All of 2010 Will Be Bad for Jobs The Business Insider's Vincent Fernando observes, "Whereas before jobless claims were merely 'stubbornly high', and not declining meaningfully, now they've clearly gotten worse, as shown below in a chart from Waverly Advisors. What this means is that even if things start to get better, and jobless claims improve, it's fair to say they will remain pretty ugly through year's end."
- Will Cause Slowed Growth or Worse Wells Fargo Securities senior economist Mark Vitner tells Bloomberg News, "There’s a red flag being waved right now that says 'Danger.' Growth is going to slow in the second half and we might face something a little more ominous than that." Bloomberg's Bob Willis explains, "A lack of jobs raises the risk that consumer spending will weaken further, just as manufacturing, which led the rebound, shows signs of stumbling."
- New Wave of Layoffs? The Washington Post's Frank Ahrens warns, "the picture is getting increasingly ugly. The latest number marked the third straight week of increase in new weekly jobless claims. That suggests that employers not only are not hiring, it suggests that they're starting to lay off workers again, and that will start a whole cascade of problems for the U.S. economy and the politicians in Washington who face reelection this November."
- Get Ready For Sustained 10% Unemployment 24/7 Wall Street's Douglas McIntyre concludes, "There is precedent for American unemployment to move about 10% and remain there for a protracted period. It did so in 1982 and 1983 for ten consecutive months. That is about to happen again, probably by October or November, and there is very little the federal government can do about it other than to assist citizens with tens of billions of dollars more in unemployment insurance."
- Nevada Worst Suffering State The New York Times' Catherine Rampell writes, "Nevada had the highest state unemployment rate in the country in July, besting even Michigan, for a third consecutive month. In July Nevada’s jobless rate was 14.3 percent, the highest rate on record for that state, the Labor Department reported. The states with the next-highest rates were Michigan, at 13.1 percent, and California, at 12.3 percent. Until this spring, Michigan had reported the highest state jobless rate for four years straight."