After a month of what looked to be a positive trend popping up for the American economy, jobless claims have once again surged above the 400,000 mark last week, halting hopes of a recovery from the recession.
The US Labor Department announced on Thursday that the number of Americans filing for state benefits for the first time came in at around 402,000 for the week ending November 26, 2011, denoting a surge of 6,000 since the previous week, dousing what was thought to be a developing relief from the stagnant unemployment epidemic that has put jobless numbers nationwide at or above 9.0 percent for months upon months now.
Economists polled by Reuters had predicted that jobless claims for last week would have peaked at only 390,000. The Labor Department had originally put the tally of claims for the week prior to that at 393,000, but a revision issued this week says that a figure of 396,000 is more accurate. Those numbers marked a seven-month low in claims, but with the latest news, however, filings have once against increased past the crucial 400,000 mark.
“There was an uptick in jobless claims after seeing a declining trend,” Wells Fargo Chief Macro Strategist Gary Thayer tells Reuters. “We need to watch claims closely. If claims start to rise from here it would not be a good sign for the economy.”
Decision Economics’ Pierre Ellis agrees, adding, “Jobless claims are not falling” and that “They’re not in a danger zone, but the trend is not becoming healthier.”
A report released on Wednesday from ADP reveals that the private-sector has shown potential in tackling the unemployment problem, but a drastic cut in government jobs has largely led to the latest dire statistics.
April 2011’s figure of 478,000 first-time jobless benefit claims signaled the worst numbers in eight months, though unemployment overall has been in an unfavorable range for more than twoyears.
In recent weeks, economists have suggested that the grave conditions for the economy in the Eurozone will cause a domino effect that will only expedite the crumbling of America’s financial sector and thwart job growth even further.
“If the Eurozone blows up, it all gets worse,” noted economist Nouriel Roubini allegedly told party guests at a gathering last month.