Jobless Claims Rise as Companies Step Up Layoffs

Unemployment benefit claims rose to 418,000 last week

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Thursday's Labor Department report on unemployment benefit filings finds that claims rose to 418,000, which is 10,000 higher than last week's figure. Reuters initial report finds it "rose more than expected." From the Department's release:

In the week ending July 16, the advance figure for seasonally adjusted initial claims was 418,000, an increase of 10,000 from the previous week's revised figure of 408,000. The 4-week moving average was 421,250, a decrease of 2,750 from the previous week's revised average of 424,000.

Ahead of the jobs report bell, Bloomberg had estimated that "initial jobless claims increased by 5,000 to 410,000 last week," which would indicate that the labor market was "struggling to gain momentum." A FactSet economist survey cited by the Associated Press had forecast that there would be fewer unemployment benefits filings this week, which "would be the third straight decline and a sign that the job market is improving." The AP, however, still notes: "applications have topped 400,000 for 14 straight weeks, evidence that layoffs are high and hiring is weak."

The gloomy layoff news was seconded by The Wall Street Journal this morning with its own report: "Companies are laying off employees at a level not seen in nearly a year, hobbling the job market and intensifying fears about the pace of the economic recovery." Specifically, 1.78 million workers were laid off from public and private employers in May. The Journal cites the usual suspects for the layoff frenzy: slack consumer spending and employers with little faith in an upcoming economic recovery.

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