New Jobless Benefits Filings Tumble    09/09 08:14

   The number of people signing up for unemployment benefits dropped to the 
lowest level in two months, an encouraging sign that companies aren't resorting 
to deeper layoffs even as the economy has lost momentum.

   WASHINGTON (AP) -- The number of people signing up for unemployment benefits 
dropped to the lowest level in two months, an encouraging sign that companies 
aren't resorting to deeper layoffs even as the economy has lost momentum.

   The Labor Department reported Thursday that new claims for unemployment aid 
plunged last week by a seasonally adjusted 27,000 to 451,000. Economists had 
predicted a much smaller decline of just 2,000.

   The number of new claims filed in the previous week turned out to be flat, 
versus a small drop as first reported. But they fell sharply the week before.

   New applications for jobless benefits shot past the half-million mark in 
mid-August, the highest level since November. Since that spike, they have 
drifted lower. New filings for jobless benefits are now at their lowest level 
since July 10.

   Meanwhile, the four-week moving average of new claims, which smoothes out 
weekly fluctuations, also fell last week, dropping by 9,250 to 477,750. So did 
the number of people continuing to draw unemployment aid.

   Even with latest decline, new filing for jobless benefits are still much 
higher than they would be if the economy is healthy. When the economy is 
growing strongly and companies are hring, requests for unemployment benefits 
fall below 400,000.

   Near double-digit unemployment is a political headache for President Barack 
Obama and his Democrat party with the congressional midterm elections just 
months away.

   Obama, in an interview with ABC News, conceded that if the midterm election 
turns out to be mostly a referendum on the economy, "we're not going to do 
well."

   Last week, the government reported that the unemployment rate ticked up a 
notch to 9.6 percent in August from 9.5 percent in July, as the number of 
jobseekers swamped the number of job openings. Private employers in August 
added a net total of only 67,000 jobs in August. Job gains would need to be 
more than three times that to drive down the unemployment rate.

   The unemployment rate has exceeded 9 percent for 16 straight months and is 
likely to extend that streak into next year.

   Without more jobs, consumers are likely to spend cautiously, which would 
keep the economy mired in its slow-growth rut.

   The economy's growth has slowed sharply from earlier this year as the impact 
of the government's stimulus package fades. Companies are wary about stepping 
up hiring because they are worried about their sales and whether the economy 
will continue to lose momentum. But in recent weeks, companies have shied away 
from resorting to even deeper layoffs.


(KA)