U.S. continuing unemployment claims hit record 5.1 million
U.S. continuing jobless claims rose 114,000 to a 5.11 million Americans, the highest level since record keeping for the statistic began in 1967, the U.S. Labor Department announced Thursday. Meanwhile, initial jobless claims rose 36,000 to 667,000 for the week ending February 21.
Economists note that the high continuing claims level reflects labor market stress, and the long time it takes for those downsized to find comparable employment. Few companies are filling vacancies, many major corporations have announced large lay-offs, and even temporary work assignments are declining, another negative sign for the labor market and the economy.
Stat worse than expected
Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 625,000. The 4-week moving average also rose 19,000 to 620,000.
Economic Analysis: The record continuing claims total is the tell-tale state: it reflects very soft labor market conditions, with few jobs available, nationally. Further, keep in mind that many economists believe the continuing claims statistic actually under-represents the number of long-term jobless adults. If a laid-off person stops looking for work because they can't find suitable employment or any work, they're no longer counted as unemployed by the Labor Department's methodology. Many economists say if this category was included, continuing claims would be 10-15% higher.
For investors, given the high level of continuing claims and the current pace of job losses, the best case scenario for the U.S. economy would be a recovery in revenue and earnings in Q3 or Q4 2009; a rising continuing claims level in the immediate months ahead would push that revenue and earnings recovery into Q1 2010.