Total number of jobless workers hits nine-year high

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Total number of jobless workers hits nine-year high

By Martin Crutsinger The Associated Press

August 23 2001, 8:36 AM CDT

WASHINGTON -- New claims for state unemployment insurance rose last week to the highest level since mid-July while the number of laid-off workers drawing unemployment benefits hit a nine-year peak.

The number of workers filing new applications for jobless benefits increased by a seasonally adjusted 8,000 to 393,000 for the week ending Aug. 18, the Labor Department reported today. That pushed new filings for jobless benefits to the highest level since the week ending July 14, when they stood at 417,000.

In a significant sign of how the yearlong economic slowdown has affected American's ability to get a job, the government reported that the number of workers drawing benefits rose to 3.18 million.

That was the highest level since the number of jobless workers drawing benefits hit 3.21 million in September 1992 as the country was still struggling to emerge from the last recession.

Economists say that both new filings and the number of people remaining in the benefit program are good indicators of the health of the labor market. The new filing shows whether layoffs are rising as companies cut their work force in a slowing economy while the number of people remaining in the program indicates how much trouble laid-off workers are having getting new jobs.

The government reported that the overall unemployment rate remained at 4.5 percent in July, its highest level since the country entered a significant slowdown in growth in the summer of last year.

The overall economy grew at a barely discernible annual rate of 0.7 percent in the April-June quarter, the weakest performance in more than eight years.

Many economists are predicting growth should rebound by the end of this year, reflecting seven interest rate reductions by the Federal Reserve and the nearly $40 billion in tax rebate checks the government is now in the process of mailing out.

However, economists warn that even if the economy does turn up as expected, the jobless rate will still go higher, reflecting the reluctance of employers to add back workers until they are sure the rebound is sustainable.

Many analysts fear that the unemployment rate could top out around 5.2 percent early next year. That level is still low by recent historical standards but well above the three-decade low of 3.9 percent reached last year.

The government said that the four-week moving average for new unemployment claims, a figure that smoothes out week-to-week fluctuations, rose to 378,750 last week, the highest level since the week ending Aug. 4.

The 3.18 million unemployed workers drawing benefits for the week ending Aug. 11 compared to 3.05 million in the previous week.

The data on the total number of people in the benefits program lag a week behind the information on new filings. Copyright © 2001, The Associated Press

-- Martin Thompson (mthom1927@aol.com), August 23, 2001

Answers

Economy Sings The Layoff Blues

Number Of Jobless Workers Getting Benefits Hits 9-Year High Weekly Claims For Unemployment Insurance Increase Economic Slowdown Hits States Hard

WASHINGTON, Aug. 23, 2001 AP (CBS) The number of jobless workers drawing unemployment benefits has risen to the highest level in nine years.

In a significant sign of how the year-long economic slowdown has affected Americans' ability to get a job, the government reported that the number of workers drawing jobless benefits rose to 3.18 million.

That was the highest level since the number of jobless workers drawing benefits hit 3.21 million in September 1992 as the country was still struggling to emerge from the last recession.

Fiscal Woes Hit States At least 17 states are struggling with budget shortfalls, according to National Conference of State Legislatures. And nearly 30 states are cutting previously made appropriations, says the National Association of State Budget Officers.

"Many, if not most states, are having tight fiscal times," said Scott Pattison, executive director of budget officers group. "A lot of finance officials in states are very concerned. Is this the worst it gets, or is this the beginning of it getting worse?" (AP)

In a related development, new claims for state unemployment insurance rose last week to the highest level since mid-July.

The number of workers filing new applications for jobless benefits increased by a seasonally adjusted 8,000 to 393,000 for the week ending Aug. 18, the Labor Department reported Thursday. That pushed new filings for jobless benefits to the highest level since the week ending July 14, when they stood at 417,000.

The four-week moving average, a more reliable indicator of jobless trends than the more-volatile weekly figure, rose to 378,750 in the Aug. 18 week, from 372,000 a week earlier.

While the rise broke a pattern of declines that began the week of July 21, the rolling average still remained below the key 400,000 mark for the fourth straight week, a sign that the worst of the labor market's deterioration may be over.

Economists have noted that while first-time and continued claims are still at relatively high levels, new claims are off their recent peaks -- a positive sign consistent with some other indications that the economy may be stabilizing.

However, while the data suggests the worst may be over, continued claims for jobless benefits above the three million level show the economy still lacks the vigor needed to support a burst of new job hiring.

The government reported that the overall unemployment rate remained at 4.5 percent in July, its highest level since the country entered a significant slowdown in growth in the summer of last year.

The overall economy grew at a barely discernible annual rate of 0.7 percent in the April-June quarter, the weakest performance in more than eight years.

Many economists are predicting growth should rebound by the end of this year, reflecting seven interest rate reductions by the Federal Reserve and the nearly $40 billion in tax rebate checks the government is now in the process of mailing out. Employment

However, economists warn that even if the economy does turn up as expected, the jobless rate will still go higher, reflecting the reluctance of employers to add back workers until they are sure the rebound is sustainable.

Many analysts fear that the unemployment rate could top out around 5.2 percent early next year. That level is still low by recent historical standards but well above the three-decade low of 3.9 percent reached last year.

© MMI, CBS Worldwide Inc.

http://cbsnews.com/now/story/0,1597,275413-412,00.shtml

-- Martin Thompson (mthom1927@aol.com), August 23, 2001.


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