The Associated Press
WASHINGTON (AP) — New claims for state unemployment insurance rose last week, fresh evidence that some workers are having trouble holding onto their jobs in a weak economy.
The number of workers filing new applications for jobless benefits increased by a seasonally adjusted 7,000 to 399,000 for the week ending June 30 after falling for three weeks, the Labor Department reported Thursday.
Claims data may be showing the job market at the very, very best has stabilized and that is an optimistic view, said economist Clifford Waldman of Waldman Associates.
The more stable four-week moving average of jobless claims, which smoothes out week-to-week fluctuations, declined last week to 407,500, the lowest level since the end of May.
Ken Mayland, economist with ClearView Economics, said jobless claims were running above the 500,000 mark during the last recession between 1990 and 1991.
Thursdays numbers, he said, are consistent with an economy showing very sluggish growth. But they are not consistent with an economy in a broad-based decline, a recession.
In a separate report, U.S. companies cut 124,852 jobs in June, a 56 percent increase from the 80,140 layoffs in May, according to information compiled by Challenger, Gray & Christmas Inc., a Chicago placement firm.
In the first six months of this year, a total 777,362 jobs have been cut. The biggest losses came from the telecommunications, automotive and computer industries.
Many economists are predicting that the nations unemployment rate will rise to 4.6 percent in June from 4.4 percent in May, and that businesses will eliminate another 25,000 jobs. The government will release employment information on Friday. Many economists are projecting the jobless rate will climb to about 5 percent by the end of the year.
While theres been a round of encouraging economic data in recent weeks, depicting an economy that may be on the mend, some economists still worry that risks remain.
The biggest fear is that the labor market will seriously weaken, causing consumers to curtail their spending and tip the economy into recession.
Most economists believe that the recently ended second quarter will mark the bottom point for the economy since it became stuck in low gear a year ago. But they are hopeful that the Feds aggressive credit-easing campaign, along with tax-cut refunds of up to $600 will fuel economic growth later this year.
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