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Published: 4/24/2009

Jobless rate up as home sales keep their decline

ASSOCIATED PRESS

WASHINGTON - Worse-than-expected news on unemployment and home sales nationally yesterday dampened optimism that a broad economic recovery might be near.

The U.S. Labor Department said initial claims for unemployment compensation rose to a seasonally adjusted 640,000, up from a revised 613,000 the week before.

That was slightly more than analysts' expectations of 635,000.

Economists are closely watching the unemployment-compensation data because they believe a sustained decline in the number of initial claims could signal the end of the recession is nearing.

Jobless claims have historically peaked 6 to 10 weeks before recessions end, according to a report by Goldman Sachs. Initial claims reflect job cuts by employers.

But the latest report shows job losses remain high. The four-week average of claims, which smooths out volatility, dropped slightly to 646,750, about 12,000 below the peak in early April. Goldman Sachs economists have said a decline of 30,000 to 40,000 in the four-week average is needed to signal a peak.

In Ohio, the continuing claims number increased last week but the first-time-filers figure dropped from the week before.

Both figures, however, are about double what they were for the same week a year ago.

For last week, 22,101 Ohioans filed for unemployment and 269,469 others continued to collect jobless benefits, according to the state Department of Job and Family Services.

In Lucas County, new filings rose last week to 926, the most in more than a month and 60 percent higher than a year earlier. The number of people continuing jobless benefits hit 9,941 last week, the lowest in more than a month, but about 50 percent higher than a year ago, state figures show.

Some economists said that despite the bigger-than-expected rise in new jobless claims nationwide, the range has remained mostly steady for about two months.

That's a signal that the pace of layoffs may be leveling off.

But in another sign of labor-market weakness, the number of people continuing to claim benefits rose to 6.13 million, setting a record for the 12th straight week.

Meanwhile, the National Association of Realtors said home sales fell 3 percent to an annual rate of 4.57 million last month, from a downwardly revised pace of 4.71 million units in February.

The median sales price plunged to $175,200, from $200,100 a year earlier but up from $168,200 in February.

The results were "a little disappointing" given that homes are more affordable than they've been in years and mortgage rates are near record lows, Lawrence Yun, the group's chief economist, said.

A top banking regulator tried to ease some concerns, saying banks and the housing sector had passed the worst part of their downturns.

"I think we're past the crisis stage. We're in the cleanup stage now," Sheila Bair, chairman of the Federal Deposit Insurance Corp., said at a financial reform conference.



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