Unemployment Claims Continue to Rise

Number of Applications Above 400,000 for Seventh Week

by Curtis White on May 10, 2011

Despite a three-year low in February 2011, the amount of people applying for unemployment benefits from the government rose a few months later as part of a three-month rising trend. This news comes after rising stock prices and other factors had begun to indicate an economy on the mend. The release of the statistics caused prices to fall in recent stock trading.

According to economists at Merrill Lynch, “The rise in claims in this week provides further evidence that the underlying trend for jobless claims has deteriorated, suggesting a slowing in the labor market recovery.”

Figures released by the Department of Labor show that the number of unemployment claims rose by 10,000 from the previous week to hit 424,000. Some blame the rise on temporary events such as the tornados hitting the southern U.S., and the dropping of Japanese auto sales due to factories damaged by the earthquake and tsunami. They hope that unemployment claims will fall again once the wake of these disasters dissipates.

“There is little in the data or anecdotes to confirm a worsening in the labor market,” said Stephen Stanley, chief economist of Pierpoint Securities.

Unemployment claims may not even be a very good way of calculating economic trends. Other economists look to the monthly employment report measuring new hires instead. Unfortunately, estimates predict the employment numbers to decline in June.

Not all the news is bad, though. While the number of people claiming unemployment grew in May, the amount at the same time from the previous year was substantially more at 467,000. During the recession, unemployment applications hit a record high of 659,000. The monthly average of unemployment claims paints a different picture from the weekly one.

According to the May average, unemployment claims actually dropped by 1,750. Because the statistic is an average of a longer period of time, it may be a more accurate representation of the current labor situation. Weekly numbers have a tendency to be more volatile, creating what may be a misleading picture.

Though the unemployment rate still remains very high at 9 percent, the first quarter of 2011 saw an average total of 250,000 new hires per month. This amount of hiring is faster than any other time since 2006 when the recession began. With all this information, perhaps the economic outlook is not so dreary after all.

Adhering to industry best practices and educating consumers about payday loans, CashAdvance.com has been furnishing consumers with quick cash since 1997.