The Labor Department reports that first-time jobless claims rose 19,000 last week to 479,000, a three-month high. The jump, described as surprisingly high, is yet more bad news for the job market after weeks of climbing unemployment. Here's what observers are saying to help us understand this report.
- Why This Matters for Everyone Bloomberg News' Bob Willis says the new numbers "exceed[ed] the highest estimate of economists surveyed by Bloomberg News." Willis writes, "A cooling economy means employers will resist taking on more staff in coming months, raising the risk consumer spending will weaken further. The jobless rate rose last month as payroll increases weren’t large enough to keep up with gains in the labor force, economists forecast a government report tomorrow will show."
- Recovery Not Taking Hold Reuters' Lucia Mutikani worries this is "indicative of a labor market that is struggling to gain momentum, putting a strain on the broader economy's recovery from its longest and deepest downturn since the Great Depression. 'While these numbers are volatile, we haven't really made progress in the labor market and that's kind of troubling when you think about the broader economic recovery,' said Andrew Gledhill, an economist at Moody's Economy.com in West Chester, Pennsylvania. 'For the recovery to turn into a self-sustaining expansion, we need people to have wage income coming in and until that happens, we are still in a tenuous position.'"
- Two Other Data Points Show Mixed News The Atlantic's Daniel Indiviglio reports, "Slightly more optimistic data was provided by ADP's monthly report. It showed a gain of 42,000 jobs in July -- better than June's 19,000 rise. Of course 42,000 jobs is still relatively week, considering there are around 15 million unemployed Americans. It was also worse than May's gain of 55,000. Another measure, the Challenger, Gray & Christmas, Inc. report (.pdf) for layoffs showed that employers expected to cut 41,676 in July. That's 6% higher than the 39,358 planned layoffs in June. Both months were higher than May."
- Way Too High For Recovery The Washington Independent's Annie Lowrey says of the latest numer on first-time job claims, 479,000, "Economists believe it needs to fall into the 300,000s to bring down the overall unemployment rate." Until then, "The number of new jobless claims has not fallen since the beginning of the year, indicating a stall-out in the recovery and implying a steady, high unemployment rate."