'Just a bad trend' - 500,000 jobless claims
NEW YORK (CNNMoney.com) -- A government report Thursday brought bad news for workers and the economy: The number of unemployed Americans seeking a financial lifeline has reached its highest level in nine months.
Last week, the number of first-time filers for unemployment insurance rose for the third time in a row, to 500,000, according to a Labor Department report released Thursday.
There were 488,000 claims filed the previous week.
"This 500,000 level is very difficult, on both a psychological and semi-technical level," said Tim Quinlan, an economist at Wells Fargo.
Initial claims had been hovering in the mid- to upper-400,000s since November.
"You can sometimes dismiss a big number and say , 'Oh, it's just one week,'" Quinlan added. "But with the four-week moving average continuing higher, you can see this is just a bad trend."
The 4-week moving average of initial claims -- a number that tries to smooth out week-to-week volatility -- was 482,500, up 8,000 from the previous week. (Read 'Tired of living paycheck to paycheck')
Can the economy recover without jobs? During the last downturn around 2001, Quinlan notes, companies' finances were in bad shape -- but consumers were weathering it well.
"In this recession, we have the opposite," Quinlan said. "Companies are flush with cash, but economic data on the consumer side have been so weak."
But all that cash on corporate balance sheets means nothing to consumers unless companies start hiring,
Quinlan said.
"Everyone's in this mode of wait and see for a sustainable recovery," Quinlan said. "But that concern will be a self-fulfilling prophecy if we don't create jobs."
Continuing claims: The government also said 4.48 million people filed continuing claims in the week ended Aug. 7, the most recent data available. That's down 13,000 from the preceding week.
Continuing claims reflect people who file each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, nor people who have exhausted their benefits but are still out of a job.
The 4-week moving average for ongoing claims fell by 1,500 to 4.53 million.
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People have been told that the economic recession now is more or less same as Great Depression in 1929. According to the data regarding economic trend in Eastern states published by Korean Consulate on July, unemployment rate hit low during July, not because people were hired, but people have given up looking for jobs.
The economic recession has been frustrating to me who is one of college graduates. I did not expect this level of difficulty until I became a senior. Big chunk percentage of graduating students in my university were continuing their education in graduate school. Ironically, motivation did not come from their passion of learning. Many students in survey of career center were shown that they go to graduate school, because they could not receive job-offer at the time of graduation. After getting Master's degree, students often find themselves in a huge pile of debt, student loans.
This is such a series of nightmare; education, graduation, debt with no job, going back to school, higher degree, but still no job and debt. I do not want to complain about the situation. However, we need to see the problem with objective as well as future-oriented views.
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