New unemployment claims drop, skewed by autos
WASHINGTON -- The number of workers filing new claims for unemployment benefits fell sharply last week to the lowest level since January, but the seasonally adjusted data was again distorted by automotive industry layoffs that amplified the drop.
Even if the recession ends this year as the Federal Reserve and many private economists expect, companies are expected to keep trimming payrolls. The unemployment rate will climb because companies won't be in any mood to hire until they feel certain a recovery is firmly rooted.
The Labor Department said new applications for unemployment insurance dropped by a seasonally adjusted 47,000 to 522,000. Economists polled by Reuters had expected claims to rise to around 575,000.
A department analyst said the drop in new claims didn't point to improvements in economic conditions. The second straight weekly decline reflected problems adjusting layoffs for temporary shutdowns at General Motors and Chrysler plants to retool for new models.
The unadjusted figures actually showed that new claims rose by 86,389 last week, which would push the total to 667,534.
The department's seasonal adjustment process expected a large increase in claims from auto workers and some other manufacturers, the analyst said. Since that didn't happen, seasonally-adjusted claims fell.
Those adjustment difficulties were also behind a big drop reported for people continuing to draw unemployment benefits, the analyst said.
The number of people still collecting benefits fell by a seasonally adjusted 642,000 to 6.27 million, the lowest level since mid-April.
The unadjusted figures for continued claims showed an increase of 63,714. That data lags initial claims by a week.
When federal and state emergency programs are included, the total benefit rolls are higher. More than 2.8 million are receiving unemployment insurance under the programs, which add up to 53 weeks of benefits on top of the typical 26 weeks. The data for the emergency programs lags the initial claims by two weeks. About 9.1 million people received jobless benefits the week ending June 27.
