More people applied for unemployment benefits last week, the first rise in three weeks and evidence that companies are reluctant to hire in a slow economy.
Initial claims for unemployment aid rose by 13,000 to a seasonally adjusted 462,000, the Labor Department said Thursday. It was only the second rise in two months. Jobless claims have been stuck near 450,000 all year. Few employers see much reason to create many jobs, and some are still laying off workers. Rail operator CSX Corp., for example, said Wednesday that it can lengthen its trains to handle rising shipments, reducing its need to hire more employees. The data illustrate a weak economy that is slowly recuperating more than a year after the recession officially ended. Businesses are unable to raise prices because of high unemployment that is not expected to ease for months, perhaps years.
The initial claims figure, while volatile, is considered a real-time snapshot of the job market. It is also a measure of the pace of layoffs and an indication of companies' willingness to hire. The four-week average of claims, a less volatile measure, rose by 2,250 to 459,000 — the first increase after six consecutive declines.
This seems to tell me that the recession really isn't over even though people are saying that it is. If it's over, why is unemployment still on the rise?
Things may be getting better on the job side of things (which I don't think is necessarily true) however, as we know there are many other things that are holding us in this recession. There's still a relatively low desire for spending which obviously means that the GDP is going to remain low.
ReplyDeleteI agree with Shaner's point. Also, as a result of low spending, firms do not have an incentive to create new jobs. Instead, they are laying off employees who they think are not an asset to the company.
ReplyDeleteGovernment should decrease the unemployment insurance, and in the same time, companies should provide more new jobs and job trainings. As a result, the opportunity cost of staying at home will increase, people will be willing to look for jobs.
ReplyDeleteIt is a reality in today economy for a firm to hire there needs to be clear justification for the need of an additionally employee. Many firms today are having a tough time justify to keep employees. I think its important to keep in mind the idea that unemployment is a lagging indicator and that recovery in this area will not happen in weeks or months but will take years. As the overall economy is rebuilt and starts to grow again.
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