If we cannot win this November based on Obama’s mercilessly pitiful economic record, then we better fold up the tent and go home because the nation will have gone nuts! Please do not get distracted by peripheral issues.
by Michelle Jamrisko and Shobhana Chandra
Applications for jobless benefits hovered last week near the highest level of the year, showing continuing weakness in the U.S. labor market.
Claims for unemployment insurance payments decreased by 6,000 to 386,000 in the week ended June 23, according to Labor Department figures issued today in Washington. The revised 392,000 claims in the previous week matched the most this year. The Bloomberg Consumer Comfort Index also showed growing apprehension over the state of the economy.
Concern about the European debt crisis and the so-called fiscal cliff that the U.S. faces at the end of this year may prompt employers to keep payrolls lean, limiting the hiring needed to boost consumer spending. A 57-cent per gallon decrease in gasoline prices since early April is providing some relief, helping offset concern the job market is weakening by allowing employed Americans to stretch their paychecks.
“We’re going to see consumers be cautious over the next few months,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who projected 385,000 claims. “Spending is going to be soft, and I think it’s because of the job market. The labor market is not creating the wage income necessary.”
Stocks pared losses in the final hour of trading amid speculation European leaders were nearing agreement on ways to halt contagion from the debt crisis. The Standard & Poor’s 500 Index dropped 0.2 percent to 1,329.04 at the 4 p.m. close in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 1.58 percent from 1.62 percent late yesterday.
The median forecast of 46 economists surveyed by Bloomberg projected jobless claims would come in at 385,000. Estimates ranged from 372,000 to 392,000.
The four-week moving average decreased to 386,750 from 387,500, which was the highest since the week ended Dec. 3.
Payrolls in May expanded by 69,000 workers, the slowest pace in a year, and have cooled each month since January. The jobless rate, which climbed to 8.2 percent in May, has been stuck above 8 percent since February 2009, the longest stretch of such elevated levels in the post-World War II era.
The employment report for June will be released on July 6.
“The problems in the job market that we saw in April and May have extended well into June,” said Sweet from Moody’s Analytics. “I think it’s going to be another disappointing report.”
Initial jobless claims reflect weekly firings and tend to fall as job growth — measured by the monthly non-farm payrolls report — accelerates.
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