Jobless Claims Raise Questions About Recovery
ROBERT SIEGEL, host:
Here in the U.S., the Labor Department says half a million people filed new claims for unemployment benefits last week. That is the most since December. The surprisingly bad news sent stock prices down and raised new questions about the strength of the economic recovery.
NPR's Jim Zarroli reports.
JIM ZARROLI: For much of this year, the job market was showing signs of recovery, growing at a slow but steady pace. But this summer, the air has seemed to go out of the market, and the number of first-time unemployment claims has unexpectedly been climbing for three weeks. Today, the Labor Department said it hit the half-million mark.
Scott Anderson is senior economist at Wells Fargo Securities.
Mr. SCOTT ANDERSON (Senior Economist, Wells Fargo Securities): Well it's, you know, it's disappointing at this stage of economic recovery that we're seeing claims rise. The labor market is clearly not yet where it needs to be for a sustainable jobs recovery.
ZARROLI: Anderson says the numbers may have been affected somewhat by the fact that so many temporary census workers have been laid off in recent weeks, but there's no disputing that economic growth is weakening.
Mr. ANDERSON: At best, we're looking at a soft patch in the economy and perhaps, at worst, the beginning of an economic downturn.
ZARROLI: Whatever is happening, more and more people are joining the ranks of the unemployed. There are people like Fred White(ph) who showed up at a New York state jobs center in Harlem today to file a claim. White lost his job at a nonprofit AIDS service center in July. He says he could get work as a handyman, but at 62, he needs something with benefits.
Mr. FRED WHITE: I don't want to do anything off the books because I need to earn something at my age now, and working off the books, you're not going to earn anything for future retirement.
ZARROLI: But there are many more people looking for work than there are jobs.
James Dixon(ph) lost his job as a security guard at a mental health facility in the Bronx two weeks ago, and he says the job market right now is dismal.
Mr. JAMES DIXON: Six years ago when I first, you know, got my training certificates and whatnot, you know, the job market was much more open. I had a variety of offers, but during the time I've been on this - I've been going around, you know, I mean, like, ex-police officers and people with, like, 10 years experience applying for the same position. It's really, really scary.
ZARROLI: Today's week claims numbers were followed by a second piece of disappointing data. A survey by the Philadelphia Federal Reserve indicated that manufacturing activity shrank this month in the Mid Atlantic region. The numbers caused stock prices, which have been on something of a rollercoaster ride lately, to fall again. And the yield on the two-year Treasury bill fell to a new low - a sign that investors expect the economy to slow.
The news comes at a bad time for Democrats who are locked in a tough re-election campaign, and President Obama used today's report to lobby for the passage of legislation that would aid small businesses.
President BARACK OBAMA: They need help. And if we want this economy to create more jobs, more quickly, we need to help them.
ZARROLI: The bill would create a $30 billion fund to help community banks finance small businesses. It would also give them tax breaks. But the president says Senate Republicans have refused to let the bill come up for a vote. The bill would be, at best, a partial solution to the unemployment problem, but as the job market shrinks, Democrats are under growing pressure to try to reverse the slide.
Jim Zarroli, NPR News, New York.