Claims Fall; When Jobs Will Come is Anyone's Guess
(AP Photo/Steven Senne) In this photo made Thursday, Nov. 5, 2009, Linda Cook, of Cranston, R.I. examines job listings at a state managed employment center, in Providence, R.I. Cook, who is unemployed, worked in mortgage sales before being laid off. New c
Christopher S. Rugaber | The Associated Press via YellowBrix
November 13, 2009
WASHINGTON — With the sputtering job market flashing an encouraging sign — unemployment claims at their lowest point since January — the White House announced a summit Thursday to try to speed the day when hiring finally starts again.
While President Barack Obama called the new jobless figures hopeful, economists think claims will probably stay too high to indicate even a slight gain in jobs until early next year.
Job creation is essential for a sustained economic recovery. Obama said the White House is “open to any demonstrably good idea to supplement the steps we’ve already taken to put America back to work.”
The White House forum, to be held in December, will bring in public and private sector experts to talk about how to get job creation humming again, Obama said.
First-time claims for unemployment aid fell last week to a seasonally adjusted 502,000, fewer than Wall Street had expected.
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Still, most economists say weekly claims would have to fall below 425,000 for several weeks to signal that the economy is actually adding jobs.
Claims for unemployment aid are generally considered a gauge of the pace of layoffs. They also indicate how much hiring is going on because laid-off workers who can’t find jobs are likely to request benefits.
“I’d be more comfortable if we were closer to 400,000” claims for jobless benefits, said Cary Leahey, senior economist at Decision Economics. “We still have a lot of work to do.”
Abiel Reinhart, an economist at JPMorgan Chase, offered a slightly more optimistic view, estimating unemployment claims in the high 400,000s would signal job gains are likely to follow within a month.
Many economists expect the nation to add jobs in the first quarter of next year, perhaps as soon as January. They project the unemployment rate to peak one to three months after that.
Other economists don’t expect the unemployment rate to peak until next summer.
Employers shed a net total of 190,000 jobs in October, according to a government survey of companies’ payrolls — the 22nd straight month of losses. The unemployment rate passed 10 percent for only the second time since World War II.
The last time the economy added jobs was in December 2007, when employers added 120,000 jobs. Initial jobless claims that month averaged about 340,000.