Fully 500,000 Americans filed new claims for government unemployment insurance last week, the highest number in nine months and a sign of persistent trouble in the job market.
The Labor Department’s jobless-claim numbers, which had been falling for much of 2009 and early this year, have been trending up in recent weeks. This reflects continuing layoffs in the private sector and in state governments, even though corporate profits have risen this year and the economy, as measured by the gross domestic product, is officially expanding. At the same time, other Labor Department reports show that employers continue to be reluctant to hire.
The number of weekly unemployment claims is still far below the levels seen in early 2009, when initial claims were rolling in at a pace above 600,000 per week. In a good economy, which would still have some “churn” of jobs being lost, economists say initial claims should be below 400,000.
Because the week-to-week numbers can be volatile, the Labor Department also reports its numbers as a four-week moving average. But this measure has been rising as well. The most recent four-week average is 482,500 claims per week. Again, that’s the highest since late 2009.
The news weighed on stock market investors today, contributing to a morning decline in the Dow Jones Industrial Average.
A central worry, for investors and job seekers alike, is that the economy may be stuck in a sort of neutral gear — no longer plunging but not growing fast enough to generate jobs. Some forecasters worry about a dip back into recession later this year.
Still, many economists predict some strengthening in the months ahead, based on a modest pickup in consumer spending. Industrial production is rising, and the amount of bank lending rose in the most recent month. All that should spur a return to at least modest job growth, they say.
In fact, in a separate economic report today, the Conference Board’s Leading Economic Index rose 0.1 percent in July.
“The data do not point to a recession,” said Conference Board economist Ken Goldstein, in releasing the numbers. But it’s a “weak economy with little forward momentum.”