Thursday, January 8, 2009
Unemployment Claims... January 3, 2009
Today, the Labor Department reported unemployment claims for the week ended January 3 unexpectedly decreased by 24,000 to a seasonally adjusted 467,000. The four week moving average of initial claims also fell by 27,000 to 525,750.
The bigger picture though pertains to continuing claims which unexpectedly increased by 101,000 to 4.61 million. This figure is higher than analysts expected and is at the highest level since November 1982.
This simply confirms that unemployed workers are having a difficult time finding new jobs.
This dip in new claims will probably be temporary as several prominent Corporations continue to layoff workers to curtail operating expenses. This week Alcoa announced a plan in which 13,000 employees would be released.
Reducing payroll expenses is surely one way of reducing overall expenses. However, corporations have to be careful in how expenses are cut. Recessions are temporary and hiring good staff may become difficult should the latter part of 2009 show signs of improvement.