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8/7/09

channelnewsasia.com/EU-Digest - New US jobless claims fall 550,000 in week

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New US jobless claims fall 550,000 in week

The United States had 6.310 million workers claiming unemployment benefits, up from 6.241 million in the week ended on July 18. Widely considered a lagging indicator, unemployment is expected to get worse even as the economy begins to stabilise and recover from the worst slump since the Great Depression was easing.

Note EU-Digest: The latest so-called positive unemployment data which has been jumped on by the Wallstreet "casino" and boosted stock market numbers around the world is somewhat bogus to say the least. The fact is that the drop in unemployment even as job losses continued to mount was the result of two separate surveys, one of individuals and a smaller one of employers. Eugenio Aleman, a senior economist at Wells Fargo, explained the shock figures by saying that a significant number of disenchanted workers had left the labor force and weren't therefore listed as unemployed. "I was surprised about the unemployment number coming down to 9.4 percent, but that was because of people dropping out of the labor force, so that is probably not going to be repeated in the future," Aleman said. Unemployment could still hit as high as 10 percent, even with an improving economy, he warned.The goods-producing sector lost 128,000 jobs, including 52,000 in manufacturing. But the agency estimated the auto sector added 28,000 jobs due to recalls from extensive plant shutdowns earlier this year. The services sector shed 119,000 jobs including 44,000 in retail. Sectors adding jobs were education and health care (17,000); leisure and hospitality (9,000); and government (7,000). The number of people unemployed for 27 weeks or more rose by 584,000 over the month to 5.0 million.

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