Economy Watch: Unemployment Claims Still Low
- Feb 24, 2012
The U.S. Department of Labor reported on Thursday that weekly unemployment claims didn’t budge for the week ending Feb. 18, standing pat at 351,000. The weekly figure has been moving down lately, and has been well below the 400,000 threshold for some time now, an important bit of data if unemployment is to shrink, according to economists.
The less volatile four-week moving average of unemployment claims was 359,000 on Feb. 18, a decrease of 7,000 from the previous week’s revised average of 366,000. So by that metric, the unemployment situation is still moving (slightly) in the right direction. The official (and some unofficial) unemployment figures for February will be published next week.
Separately, the U.S. Bureau of Labor Statistics said on Thursday that employers took 1,434 mass layoff actions (more than 50 workers each) in January involving 129,920 workers. The number of events was up by 50 compared with December, but the number of workers involved was fewer in January by 15,728.
Sears to raise cash with RE sales
Sears Holdings Corp., a real estate company that also operates a large number of legacy retail stores, said on Thursday that it was going to sell off some of its real estate. One sale will be 11 stores to General Growth Properties in a transaction that’s expected to raise $270 million. A more complex deal would involve spinning off the company’s Hometown and Outlet brands through a rights offering, which might realize as much as $500 million.
The company apparently needs the cash that such sales would generate. Retail revenues have been down for years, and for 2011, Sears lost $3.14 billion, a figure that included $2.7 billion of charges (and $2.4 billion lost in the fourth quarter alone). In 2010, the company reported a profit of $133 million.
Sears also said that it’s going to conclude an experiment in upscale retail that the pre-Kmart-merger Sears undertook in 1998, namely by closing its big box Great Indoors stores. In the concept’s heady early days, the company planned to open as many as 200 Great Indoors stores, but ultimately no more than 20 were opened. Currently the company operates nine of the stores scattered around the country in Arizona, Colorado, Illinois, Maryland, Michigan, Ohio and Texas.
Recession dead ahead for euro zone
The European Commission came to a not-too-startling (though maybe understated) conclusion on Thursday when it said that the euro zone as a whole is facing a “mild recession” in 2012. But the organization also tried to temper that conclusion by also claiming that there are “signs of stabilization,” and that modest growth would “return in the second half of the year.” Overall, in 2012 GDP is forecast to remain unchanged in the EU and to contract by 0.3 percent in the euro area.
“While 17 EU countries are expected to see growth, others are being held back by ongoing market uncertainty, concerns about the public debt crisis, and lower demand for exports,” the organization said. “GDP growth is therefore expected to be stagnant in one country and negative in nine.” Those negative nine include the usual suspects—Greece, Spain, Italy, Portugal, Hungary—plus some others not generally regarded as dangerously in debt, such as Belgium, the Netherlands, Cyprus and Slovenia. The Czech Republic will be the stagnant economy.
Wall Street had a mild up day on Thursday. The Dow Jones Industrial Average was up 46.02 points, or 0.36 percent, but didn’t quite make it to 13,000. The S&P 500 gained 0.43 percent and the Nasdaq advanced 0.81 percent.