Numbers are bad news for retailers hoping for more consumer spending.
The number of Americans filing first-time claims for jobless benefits continues to rise, the Labor Department said last week, indicating employment deterioration shows no signs of slowing down.
The actual number of initial claims under state programs totaled 454,216 as compared to the 343,169 initials claims during the same period in 2008. Last week, the Labor Department projected 576,000 seasonally-adjusted claims, an increase of 15,000 over the week the before.
"What we're seeing is another stage of increases in unemployment rate," says Dr. Eugenio Alemán, a senior economist at Wells Fargo. "This is bad news for consumers, who remain very cautious because even if they see prospects of an improvement, they have lost so much in terms of wealth."
This is also bad news for retailers, says Alemán. "I don't see consumption recovering at a fast pace anytime soon."
Although jobless rates are on the rise, California and Michigan had 5,000 and 1,400 fewer layoffs than the previous week, respectively, in the construction, trade and service industries. These positive data points present stabilization in the labor market despite the lack of a market demand.
"Small businesses are the engine of job growth in the US economy," says Alemán, "the prospects are strong but the recovery is not there."
With so many people filing for unemployment or grasping to keep a hold of their current jobs, the economy is still not receiving in stimulus it needs to start growing. Roughly 6.7 million jobs have been lost since the downturn began in December 2007, the worst since World War II.