360,000 Initial Jobless Claims

unemployment line

Initial jobless claims spiked last week to 360,000. Even after the prior week’s upward revision it was a jump of 32,000 claims. It’s going to be kind of hard to put a positive spin on this.

The number of Americans filing new claims for unemployment benefits climbed last week at the fastest pace in six months, a worrisome sign for the economy which has been hit by government austerity.

Initial claims for state unemployment benefits jumped by 32,000 to a seasonally adjusted 360,000, the Labor Department said on Thursday. That was the biggest jump since November and confounded analysts’ expectations for a more modest increase.

Claims for the prior week were revised to show 5,000 more applications received than previously reported.

A Labor Department analyst said no states had estimated their data, and that there were no signs furloughs for government employees played a significant role in last week’s increase in claims.

The U.S. economy has shown signs that growth slowed late in the first quarter and in April as an austerity drive by the federal government weighed on consumers and businesses. Washington hiked taxes in January and initiated sweeping budget cuts in March. (Read More)

Happy Thursday! If you still have a job you should celebrate. That’s quite an accomplishment in this new normal economy.

Update – This isn’t the only bad economic news this morning. What’s that they say about bad news coming in threes?

The second negative economic number came from Housing Starts, which plummeted from a downward revised 1021K to just 853K, well below expectations of 970K, the biggest miss since January 2007 and validating the data we have shown previously in the collapse of lumber prices. So much for the “that” recovery too. …

Finally, confirming that the Fed’s transmission channels are completely broken, and yet paradoxically giving Bernanke even more green light to continue building up future inflation and more QE, was CPI data, which declined from -0.2% to -0.4% in April, the worst MoM drop since December 2008 despite the monetary pumpathon from the Fed and BoJ. This is the second monthly miss in a row (and fifth of the last six). The YoY figures also misses +1.7% relative to a 1.8% expectation (ex Food and Energy) – also the lowest print since June 2011, although not very unexpected in light of the previously reported weak PPI data. (Read More)