WASHINGTON (AP) — New applications for unemployment insurance reached a half million last week for the first time since November, a sign that employers are cutting jobs again as the recovery slows. þþThe Labor Department said Friday that initial claims for jobless benefits rose by 12,000 last week to 500,000, the fourth increase in the last five weeks. Wall Street economists had forecast that claims would drop. þþThe four-week average, a less volatile measure, rose by 8,000 to 482,500, the highest since December. A Labor Department analyst says there were no special factors that distorted the numbers. þþThe increase suggested that the economy was creating even fewer jobs than in the first half of the year, when private employers added an average of about 100,000 jobs a month. That was barely enough to keep the unemployment rate from rising. The jobless rate has been stuck at 9.5 percent for two months. þþJobless claims declined steadily last year from a peak of 651,000 in March 2009 as the economy recovered from the worst downturn since the 1930s. After flattening out earlier this year claims have begun to rise. þþThe number of people continuing to receive benefits fell by 13,000 to 4.5 million, the department said. The continuing-claims data lags initial claims by one week. þþBut that does not include millions of people receiving extended unemployment insurance, paid for by the federal government. About 5.6 million unemployed workers were on the extended unemployment benefit rolls as of the week ending July 31, the latest data available. That was an increase of about 300,000 from the previous week. þþDuring the recession, Congress added up to 73 additional weeks of benefits on top of the 26 weeks customarily provided by the states. The number of people on the extended rolls has increased sharply after Congress renewed the extended program last month. It had expired in June. þþPrivate employers added only 71,000 jobs in July. But that increase was offset by the loss of 202,000 government jobs, including 143,000 temporary Census Bureau positions. þþEconomists are concerned that the unemployment rate will start rising again because overall economic growth has weakened significantly since the start of the year. þþIn a healthy economy, jobless claims usually drop below 400,000. But the recent increases in claims provide further evidence that the economy has slowed and could slip back into a recession. Many analysts are worried that economic growth will ebb further in the second half of this year. þþAfter growing at a 3.7 percent annual rate in the first quarter, the economy’s growth slowed to 2.4 percent in the second period. Some economists forecast it will drop to as low as 1.5 percent in the second half of this year. þ
Source: NY Times
