Jobless Claims Jump Is Bad Omen For Economy

[Purveyor]

Source: Associated Press

By CHRISTOPHER S. RUGABER – 3 hours ago

WASHINGTON (AP) — Jobless claims rose unexpectedly last week, the government said Thursday, while companies responded to the slowing economy by producing more with fewer workers.

It was not great news for American workers, who have seen jobs decline and wages erode, but it may signal less inflation worries for the Federal Reserve.

The Labor Department reported that new applications for unemployment insurance rose to a seasonally adjusted 444,000, up 15,000 from the previous week. Economists had expected claims to drop to 420,000.

That news, plus disappointing sales reports from retailers, sent financial markets down as investors lost hope for an end of the year recovery. The Dow Jones Industrial Average dropped 344.65, or 2.99 percent, to 11,188.23, its worst tumble since June 26, when it fell more than 3.03 percent. The Standard & Poor's 500 index fell 2.99 percent, and the Nasdaq composite index slid 3.20 percent.

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Many economists expect unemployment will continue to rise for the rest of the year. A separate report on Thursday indicated that hiring by companies in the service sector has declined.

"Across the board, we're seeing evidence that labor conditions are worsening," said Carl Riccadonna, senior economist at Deutsche Bank Securities.

A tougher job market can crimp consumer spending as laid off workers and those who fear for their jobs cut back on their purchases. That can further weaken the economy.

"The second half of this year does not look good," Riccadonna said. "Consumer spending is stalling."

Read more: http://ap.google.com/article/ALeqM5jsanM66tszKz1zFq0LOG4XvWS7zAD9304B5O0

[kurth_]

1. Many more are still unemployed but ran out of unemployment insurance

and therefore not counted.

[madrchsod]

2. i was counted again because of the 13 week emergency benefits

i`m not sure if the program is still in effect.

[oldskool]

3. As long as both parties agree to give Geogia

$1 billion dollars to protect the pipeline plus the $100
billion to build it. And no royalties for us, just for the
corporations. They really don't give a shit about America. And
have lost my support.Sad to say.

[MikeNearMcChord]

4. The economy is a Republican killer

People out of work or worried about it want to hear solutions, not stupidity about family values, or who is sleeping with whom. Bill Clinton won in 1992 because of the economy vs the GOP's culture wars. Let's do it again.

[OhioChick]

5. Agreed. n/t

[mnhtnbb]

6. Very bad news for the Repubs. They can't spin this as the fault of librul bloggers.

[Third Doctor]

8. I agree with a earlier statement

The sad old Repub playbook on trying to legislate morality may not cut it this time. A person who votes on intangibles and things that are really not there business instead of for putting food on the table and having adequate healthcare are morons imo.

[NeoConsSuck]

7. But I thought that trickle-down economics never fails??

The whole capitalist pyramid scheme is coming to a screeching halt.

The Fed and investment banks thought as long as they had suckers to buy mortgages, and bigger suckers to buy these packaged subprime turds, profits would never end, and our economy would never have a rainy day.

It was supposed to be a never ending roaring twenties.

But don't worry investment bankers. The Republicans will make sure the taxpayers bail you out, so you dont' miss out on your bonuses. And if someone has to pay, let it be the middle class slobs standing on an unemployment line.

[atjrpsych]

9. devastating and big increase of depression due to financial conditions

It is really sad, there has been a huge increase in the acute psychiatric cases we have been seeing lately. So many of the cases have been people with no psychiatric history that have been "pushed over the edge" and diagnosed with clinical depression, mostly due to their finances and loss of employment. It feels really hopeless since financial stress has little to do with a shift in perspective.

[Robbien]

10. No jobs is bad for workers and the economy, but the headline

chooses to highlight the fact that Wall Streeters are being hurt. Just goes to show where AP's priority is.

[radfringe]

11. blatherhead on radio yesterday also mentioned worker productivity

as another factor making markets nervous

Productivity is up, so why would that make the markets nervous? When you look at all the other reports pointing in a negative direction, the only reason productivity would be "up" is employers are cutting their workforce numbers and/or work hours

[GuvWurld]

12. Unexpected?

Puh-leaze

[Odin2005]

13. Hey Pukes: It's STILL the economy, stupid! n/t.

[dysfunctional press]

14. gonna be an UGH-ly christmas season for retail this year.

even IF they do manage to get gas down to the $3-$3.25/gallon range by selection time.

interesting times and a bleak winter are a-comin'...