Don Miller is an Contributing Writer at Money Morning
By Don Miller
Contributing Writer
Money Morning
Initial claims for unemployment benefits fell by 94,000 last week, the biggest drop in 16 years, the U.S. Labor Department said today (Wednesday). However, the data was almost certainly skewed by a shortened Christmas week, as continuing total jobless rolls surged to their highest levels since 1982.
“The underlying picture is terrible for the labor market,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. The initial claims figures were “distorted by some sort of breakdown in the seasonal adjustment process, with the holidays,” he told Bloomberg News.
A look at the unadjusted unemployment data paints a clearer picture of the economic slowdown. The number of initial unadjusted claims increased to 718,468, up 1,892 from the previous week. That total is up by a whopping 200,000 claims or nearly 40% from 2007.
While the seasonally adjusted numbers showed a surprising drop, they continue to support an alarming rise in the number of people who are losing their jobs, signaling a worsening labor market as the economy heads into the second year of a recession.
Initial claims for jobless benefits fell by 94,000 to a seasonally adjusted 492,000 in the week ended Dec. 27 from an unrevised 586,000 the week before. But the number of continuing claims, drawn by workers on benefit rolls for more than one week, surged by to 4.506 million, the highest level in 26 years.
“Given that these data cover the Christmas holiday and a period of winter storms that may have prevented people from filing, we are not reading much into this decline in jobless claims. At this point, we look for a 500,000 decline in nonfarm payrolls in December and a rise in the unemployment rate to 7.0% from 6.7%,” RDQ Economics told the Wall Street Journal.
Extended shutdowns by automakers also contributed to the distortions.Auto-parts makers and suppliers are firing more workers as General Motors Corp. (GM). and Chrysler LLC seek government funds to continue operations. Auto industry sales in November were the lowest since 1982.
It’s not hard to guess where the biggest jumps in unemployment claims were either. The roll of states with the biggest jumps in claims are led by California, Kentucky, Michigan, Missouri, and Indiana – all places suffering from debilitating slumps in home construction and auto manufacturing.
Jobless claims will almost certainly continue to rise, as U.S. automakers expand their traditional holiday shutdowns to clear out inventory. Ford (F) and General Motors recently shuttered 29 of 35 assembly plants until at least the first week in January, while Chrysler idled all 30 of its plants on Dec. 17 for a full month.
And now at least one large auto-parts maker will follow their lead, and close plants. Southfield, Michigan-based auto parts supplier Federal-Mogul Corp. (FDML), controlled by billionaire Carl Icahn, will cut 4,600 jobs worldwide. The layoffs come on top of 4,000 jobs cut in September.
“We continue to take actions in response to the ongoing significant downturn in regional markets and global industry outlook,” Chief Executive Officer Jose Marie Alapont said in the statement on Dec 19, according to Bloomberg News.
Through November, U.S. job losses have totaled 1.9 million. Unemployment rolls are likely to continue to rise next year, as many economists forecast the jobless rate to hit 9.0% by the end of 2009 from 6.7% last month.
Read More
Investment News
- Related Articles
- Related Q&A
- Lower Initial Jobless Claims Hide Surging Unemployment
- With U.S. Unemployment At 8.1%, Here’S Where To Invest Today
- Unemployment Soars, But the Markets Roar
- Unemployment Insurance: Get Financial Help When You are Jobless
- Tips on Finding Unemployment Insurance for Teachers
- Unemployment Is No Walk In The Park- How Americans Are Paying The Price For The Economic Downturn
- Crime Rates Increase As Unemployment Increases - Need For Self Defense Products
- JOBLESS & STARTING A HOME BUSINESS
Japanese Candle Charting Opens Doors of Understanding
By: William Kurtz | 10/07/2009The "bar chart" method of financial price display is fine as far as it goes, but it has been superseded by the Japanese Candlestick method, which uses the Candlesticks as the base. It then goes on further so as to display the area between the opening price and the closing price as a cylinder, left white if the close is higher than the open and filled in black if the close is less than the open. Simple, but highly effective and revealing.
You Can Now Make Good Stock Investments - Penny Stock Fortunes
By: Bryan Burbank | 10/07/2009Penny stocks are a great way that you can make money in the stock market but it is important that you learn how they work. There are many advantages to investing your money in the stock market because over the long haul it has been proven that you will come out ahead. The benefits to investing in penny stocks are that you will be able to maximize profits because the cost of each share is so low. You will be able to purchase a large amount of penny stocks for a small price, so when the price pe
You Can Easily Get Rich Trading Penny Stocks
By: Bryan Burbank | 10/07/2009Many people are looking for ways to invest their money and now because the housing market is bad, many people are finding that penny stocks can be good for them. The best part about investing in penny stocks is that you can make a lot of money with a small investment. You have a lot of leverage because you are able to buy a large amount of shares with a small amount of money. What this does for you is when the price per share goes up a small amount you make a great profit. It is important tha
How to Have a Penny Stock Fortune - Tips to Make Money Investing in Penny Stocks
By: Bryan Burbank | 10/07/2009If you are looking for a great investment in you may want to consider buying and selling penny stocks. There are many advantages to trading in these types of securities because you get a lot bang for your buck. Sometimes it is difficult to be positive when we see the stock market at such low levels. You must realize that over time the stock market is one of the best things to invest your money in. One way that you can maximize your profits is to use a penny stocks because they allow you to buy m
Beware of 'bonus rates on saving accounts'
By: Sam Gooch | 10/07/2009Those Britons on the search for a new savings account are being advised to do so with care, it has been revealed. Careful consideration should be taken when selecting a savings account, it has been suggested.
You Can Now Profit With Trading Penny Stocks
By: Bryan Burbank | 10/07/2009If you are looking to make money now than you need to take advantage of penny stock day traders. There are so many great advantages to investing in the stock market and even during bad economic times you can profit. The most important thing that you do is get the best advice when investing in penny stocks. There are many publications that specialize in buying and selling these types of investments and this can benefit you because to make money you need to have the knowledge. If you have look at
Learn How to Find the Best Penny Stock Investments
By: Bryan Burbank | 09/07/2009Many people like to invest in the stock market so that they can build a nest egg for the future. If you are a more risky type person then you may want to look into buying and selling Penny stocks. Many people have made a fortune with these type of stocks because you can purchase a large amount for a small price and the advantage is if the stock goes up just a small amount, because you have so many shares. You make a great profit. It is always best to get as much advice as possible when buying
Find the Best Penny Stocks - Invest in the Right Penny Stocks to Make Money
By: Bryan Burbank | 09/07/2009When looking for great stocks to invest in you want to consider the opportunities that are available in penny stocks. If investing in penny stocks you need to make sure that you understand how these type of investments work before you jump in. There is a lot of money to be made when you buy inexpensive stocks and the advantage is that you can own a lot of shares for a small amount of money. You make money because the stock rises just a fraction and with having so many shares, your investment p
Gazprom-ukraine Dispute Could Leave Europe Out in the Cold
By: Money Morning | 01/01/2009 | InvestingRussia’s state-run energy monopoly, OAO Gazprom, is warning its European customers that a dispute with Ukraine could lead to supply disruptions, as the Eastern European transit state siphons off supplies to meet its own energy needs.
Lower Initial Jobless Claims Hide Surging Unemployment
By: Money Morning | 01/01/2009 | InvestingInitial claims for unemployment benefits fell by 94,000 last week, the biggest drop in 16 years, the U.S. Labor Department said today. However, the data was almost certainly skewed by a shortened Christmas week, as continuing total jobless rolls surged to their highest levels since 1982.
Gold Bugs Have Fed to Thank for Recent Rally
By: Money Morning | 01/01/2009 | InvestingThe currency markets reaction to the Federal Reserve’s recent interest rate cuts has ignited a rally in gold, as investors weigh the benefits of owning the yellow metal versus U.S. Treasuries and the dollar.
Global Investment News Roundup
By: Money Morning | 01/01/2009 | InvestingBarclays: Japan 4Q GDP Will Shrink 12.1%; Holiday Sales Worst Since 1970; American Greetings Buys Recycled Paper Greetings; Consumer Confidence Hits Record Low; China Eastern Gets Additional Funds; Gazprom Gets Paid
U.s. Home Prices Post Record 18% Annual Drop in October
By: Money Morning | 31/12/2008 | InvestingHome prices fell a record 18% from October 2007 to October 2008, according to S&P Case Shiller Index.
Gmac Loosens Credit Reins After $6 Billion Treasury Loan
By: Money Morning | 31/12/2008 | InvestingThe U.S. Treasury has agreed to lend $6 billion to GMAC LLC, the financing arm of General Motors Corp., in the latest government effort to keep the biggest U.S. automaker out of bankruptcy.
Global Investing Roundups
By: Money Morning | 31/12/2008 | InvestingMid-East Violence Drives Crude Higher; IndyMac to be Sold by Year’s end; Retailers in for Tough Start to 2009
Buy, Sell or Hold: Mine Profits From Bhp Billiton
By: Money Morning | 31/12/2008 | InvestingCommodity prices have tumbled but BHP Billiton is well positioned to capitalize on a rebound that may come quicker than Wall Street thinks.