Jobless Claims Up

Real Estate Agent with Keller Williams Realty - Atlantic Shore

by The Associated Press

text size A A A October 14, 2010

Applications for jobless benefits rose for the first time in three weeks, evidence that companies are reluctant to hire. Initial claims rose by 13,000 last week to a seasonally adjusted 462,000. And the U.S. trade deficit widened sharply in August, reflecting a surge in imports of consumer products.

Jobless claims have been stuck near 450,000 all year. Few employers see much reason to create many jobs, and some are still laying off workers. Rail operator CSX Corp., for example, said Wednesday that it can lengthen its trains to handle rising shipments, reducing its need to hire more employees.

Cash-strapped state and local governments are cutting jobs, adding to the ranks of those out of work and likely adding to the initial claims for unemployment aid.

State and local governments shed 83,000 jobs in September, the Labor Department said last week. The economy lost a net total of 95,000 jobs overall and the unemployment rate remained stuck at 9.6 percent.

Local governments cut the most jobs in 28 years last month, most of them teachers and other school employees.

The initial claims figure, while volatile, is considered a real-time snapshot of the job market. It is also a measure of the pace of layoffs and an indication of companies' willingness to hire. The four-week average of claims, a less volatile measure, rose by 2,250 to 459,000.

Claims have fallen significantly since June 2009, the month the recession ended. First-time claims topped 600,000 at the end of that month.

But most of the improvement took place last year. Since January, claims have fluctuated around 450,000.

Total unemployment benefit rolls, meanwhile, fell last week, most likely because many of those out of work are using up their benefits.

The number of people continuing to receive benefits fell by 112,000 to just under 4.4 million, the department said. But that doesn't include several million people who are receiving benefits under extended programs approved by Congress.

The number of people on extended benefits dropped by about 340,000 to about 4.8 million in the week ending Sept. 25, the latest data available. All told, about 8.6 million people received unemployment aid that week.

Trade Deficit With China Hits Record High

Separately, the Commerce Department said Thursday that the trade deficit in August increased 8.8 percent to $46.3 billion. Exports edged up a slight 0.2 percent but this increase was swamped by a 2.1 percent jump in imports.

Imports of consumer products climbed as businesses restocked their shelves in hopes of a pickup in consumer demand.

The politically sensitive deficit with China climbed to an all-time high, a development that was certain to increase pressure on the Obama administration to take a tougher line on trade issues including China's tightly controlled currency.

So far this year, the trade deficit is running at an annual rate of $502.5 billion, up 34 percent from the $374.9 billion deficit for all of 2009, which had been the smallest imbalance since 2003.

Economists believe trade will be less of a drag on GDP in the July-September quarter, but Jennifer Lee, an analyst with BMO Capital Markets, said that the bigger-than-expected widening of the August deficit would ensure that GDP growth for the third quarter will remain at an anemic pace below 2 percent.

For August, the 0.2 percent rise in exports pushed them to $153.9 billion, the highest level in two years. The small gain reflected increases in U.S. sales abroad of farm goods, autos, computers and oil-field drilling equipment. Those gains offset big declines in sales of commercial aircraft, industrial engines and ship engines.

The 2.1 percent rise in imports pushed them to $200.2 billion and reflected a big jump in demand for foreign food products, which climbed to an all-time high of $7.8 billion. Imports of petroleum products rose 3.5 percent to $27.6 billion, the highest level since April, as the average price of a barrel of imported crude oil rose to $73.47, up from $72.09 in July. That was the highest price since May.

Imports of capital goods rose to $38.6 billion, the highest level in more than two years, with big increases in demand for foreign-made semiconductors, generators and other types of industrial machinery.

The deficit with China rose 8.2 percent to an all-time high of $28 billion, surpassing the old record of $27.9 billion set in October 2008. So far this year, the U.S. deficit with China, the largest imbalance with any country, is running 20.6 percent above the pace set in 2009.

Food, Energy Costs Push Up Producer Prices

Wholesale inflation stayed tame last month outside of a sharp rise in food and energy prices.

Moderate price inflation allows the Federal Reserve to keep the short-term interest rate it controls at a record low of nearly zero, where it has been since December 2008. Low inflation also makes it more likely the Fed will launch another effort to lower longer-term rates by purchasing Treasury bonds when it meets next on Nov. 2-3.

The producer price index, which measures price changes before they reach the consumer, increased 0.4 percent in September, the Labor Department said Thursday. It rose by an equal amount in August.

Excluding volatile food and energy costs, core producer prices rose only 0.1 percent in September from the previous month. That rise was driven by higher car and truck prices. In the past year, core prices have risen only 1.6 percent.

A 1.2 percent rise in food prices and a 0.5 percent rise in energy prices drove the index up. Wholesale prices have increased 4 percent in the past year. The cost of meats and fresh vegetables drove the increase in food prices.

The weak economy is keeping a lid on prices. Frugal consumers are seeking out discounts and balking at higher costs. That has made it harder for producers to raise the prices they charge to retailers

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Wishing You The Comforts Of Home.


Julie Staradumsky

Keller Williams Realty - Atlantic Shore

200 Tilton Rd.   Suite #5

Northfield, NJ 08225

(609) 484-9890     fax:(877) 773-6675

Comments (2)

Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC


Thanks for sharing the jobless claims report.

Good luck and success.

Lou Ludwig

Oct 14, 2010 01:35 PM
Julie Staradumsky
Keller Williams Realty - Atlantic Shore - Northfield, NJ

Thanks Lou, I feel for all whom are unemployed, under employed and their families as we are all going through trying times, Keep The Faith.

Oct 14, 2010 02:16 PM