If folks were hoping the end was in sight, they were disappointed on Thursday when jobless benefits rose yet again. The number of Americans who filed for first time unemployment benefits crept up by 4,000 to a seasonally adjusted 372,000. This, according to the Labor Department, is the highest level in five weeks and is putting new pressure on a troubled presidential road to the White House.
The question now is if the labor market isn’t moving fast enough to make any significant changes for the unemployment rate, what’s on the horizon? Politics are alive and well as both President Obama and Governor Romney are using the news to their advantage. Republicans are publicly wondering why the Obama Administration has failed Americans while the Obama campaign insists changes are coming.
New Claims Average
The four-week moving average for new claims, which some say doesn’t provide a true measure, was 368,000 last week and is a slight increase from the prior week. It’s still 2.1% lower than in the second week of July. Remember, this is the week the numbers actually improved and resulted in what the government says was 163,000 new jobs created. The unemployment number, however, didn’t budge.
Now, many are wondering how anyone can believe the economy is improving. The Fed will be carefully reviewing all data with hopes of finding something to strengthen the American taxpayer‘s hopes. One small advantage comes that data that reveals layoffs are down slightly.
Still Struggling Economy
In a meeting earlier this week, officials spoke of the need for interjection regarding the still struggling economy. After releasing its minutes from its meeting in early August, the review showed it’s likely going to require that interjection and could come as soon as September. On Wednesday, Federal Reserve officials spoke with “increased urgency” about the need for more assistance with the struggling economy. Specifically, Federal Reserve officials voiced their near readiness to “launch a new bond buying program” and that could happen as soon as their next meeting in September.
The goals are the same: lower long term interest rates. Analysts say it’s the sure way to encourage both borrowing and spending. It’s important to not underestimate the concerns regarding the fiscal cliff that’s slated for January 1 2013 unless Congress intervenes – and there are growing concerns on both sides that the government won’t do the right thing – even as “the right thing” differs depending on whom is asked. The Fed, in recent months, took big steps to bring down interest rates. Most notably was its purchase of more than $2 trillion in bonds and mortgage-backed securities in two previous rounds of bond purchases.
That data, however, is muted compared to other considerations. The Labor Department is saying not much has changed and won’t while the economy continues to face formidable threats. The so-called “fiscal cliff” is a problem as are the many financial problems in Europe. Other reports released on Thursday show “economic malaise from Beijing to Berlin”.
It’s believed the euro zone economy will shrink around 0.5 percent in the current quarter and further, these weaknesses could potentially spread through Germany, the region’s largest and strongest economy, say some analysts. Another number to watch is the HSBC Flash China manufacturing PMI, which fell to 47.8 for August. This marks the lowest level since November and is significantly lower than July’s final figure of 49.3.
Traditional State Programs
Here in the United States, the number of folks who are still receiving benefits under traditional state programs after an initial week of aid rose 4,000 to 3.317 million in the week ended Aug. 11, the claims report revealed. This means a total of 5.59 million Americans were receiving unemployment benefits under all programs in the week ended Aug. 4, and this number is down 109,812 from the prior week.
From April to July 2012, the number of employed young people between 16 and 24 years old rose 2.1 million to 19.5 million, according to the same report on Thursday. This brings the percentage of those same age groups who are working to 50%. These numbers generally improve in the summer months, which is considered the peak for teens and young adults. At the same time, Unemployment among youth increased by 836,000 from April to July 2012, compared with an increase of 745,000 for the same period in 2011. Again, the focus is on the seasonal changes in youth employment and unemployment that occur each spring and summer.
Also, 16 to 24 year olds working or actively looking for work rose between April and July; again, this is due to the seasonal considerations, such as summer jobs for high school and college students. This summer, the youth labor force grew by 2.9 million, or 14.2 percent, to a total of 23.5 million in July.
Both the unemployment rate and the numbers that define that rate have changed little in 2012. The rate stands at 8.2% and the number of unemployed Americans remains at 12.8 million.