The Marketplace Report: Spike in Unemployment Claims
MADELEINE BRAND, host:
Back now with DAY TO DAY. I'm Madeleine Brand.
New unemployment claims were up sharply last week according to the Labor Department today. It's the latest sign that the job market has not yet recovered from the Gulf Coast hurricanes. Bob Moon joins us with more from the "Marketplace" news bureau in New York.
And, Bob, what are the latest figures, and should we worry?
BOB MOON ("Marketplace"): Well, it's certainly not good news. This takes the number of unemployment claims back up to their highest point since the middle of last month, and it happens just when it appeared that things were finally stabilizing a bit. In fact, in the previous week, new filings had actually registered a sizable decline, but this past week, the number of new applications for unemployment insurance was up by a seasonally adjusted 30,000 jobs. Now the consensus among leading economists had been a total around 312,000. This takes the number of claims up to 335,000.
BRAND: And so what does this tell us about the state of the economy, in general, and, in particular, could this affect the Fed's policy of raising interest rates?
MOON: Yeah, a good question. I guess you could say it depends a lot on which economist you talk to and on which street corner they're watching from. The private business research group The Conference Board takes a look at help wanted ad volume across the country, and it's finding that the level is pretty much stagnant in the past month. And that group's economists are saying that this is a slower hiring pace; it suggests that job growth could stay soft for several months to come. The fear there is that that could cause the economy to stall out perhaps, and that could set up something of a self-fulfilling prophecy here.
You know, just yesterday, the Federal Reserve released the minutes of its latest monetary policy meeting, which brought another interest rate increase earlier this month, and the Fed policy-makers have been trying to balance their effort to keep inflation in check with the worry that interest rates could put the brakes on the economic recovery. Well, now at their meeting this month, it turns out that their discussion did touch on their belief that the hurricanes had only temporarily depressed unemployment and, therefore, they should go ahead and raise interest rates again. Well, that view could change now and this could even convince them to ease up on the higher interest rates.
BRAND: Well, any good news out there to--something give thanks for heading into this holiday weekend?
MOON: Well, there is one bit of good economic news out there today from the University of Michigan, which delivers a subscription-only report on consumer sentiment. And sources who have seen that report tell Reuters that it shows consumer sentiment actually rose this month, and that the increase was actually better than most analysts had been fearing. It rose from an 81.6 percent level to 74.2 percent in late October, and analysts had been expecting a rise to around 80 percent, so it's slightly above that.
Today in the "Marketplace" newsroom, we'll be taking a look at what makes a successful airline.
BRAND: Bob Moon of public radio's daily business show "Marketplace." And "Marketplace" is produced by American Public Media.
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