Unemployment Declines–But Remains a Concern
- May 22, 2008
Washington, D.C.–The number of recently laid-off workers that filed for unemployment benefits showed a surprise drop last week and reached the lowest level in a month, the Labor Department said Thursday.Applications for jobless benefits totaled 365,000–9,000 less than last week, according to the New York Times.Yet–even with the drop–claims are still at a high enough level to indicate that the economy is causing the labor market trouble.The four-week average for claims increased to 372,250, a considerable rise from a year ago when the four-week average was roughly 300,000.Because of an earlier Easter and a General Motors auto supplier strike, analysts have had a hard time reading the level of jobless claims in recent weeks. But economists say claims have been rising since fall, and the number of workers receiving benefits was above the 3 million mark for the fourth straight week in the week ending May 10.Continuing claims have not been that high since 2004.On Wednesday, the Federal Reserve revised its previous economic outlook to indicate the economy may be slower this year. Overall economic growth should slow to between 0.3 percent and 1.2 percent in 2008, the Fed said–a reduction from its original projection that the economy would grow between 1.3 and 2 percent. The Fed also said the unemployment rate could rise more than originally forecast and now predicts unemployment will increase to between 5.5 percent and 5.7 percent by the end of 2008. In January, the Fed said the unemployment rate was set to increase up to 5.3 percent. Unemployment is currently at 5 percent.