August 26, 2010

Trouble ahead for U.S. employment

After recovering a million jobs from January to May of this year, the U.S. economy has shed 350,000 positions in the latest two months, June and July.

August figures look to be disappointing too, as initial jobless claims were close to 500,000 in the three weeks prior to the latest report.

“Half a million workers seeking unemployment insurance for the first time is usually taken to mean that the number of people just let go is matching the number of new hires,” said Alex Carrick, CanaData chief economist.

“There was considerably more optimism about jobs only six week ago when the initial jobless claims number fell to only 427,000, its lowest point in a couple of years.”

This week’s initial jobless claims figure retreated from the half-million benchmark to stand at 473,000.

“This is a break in the upward movement of the series and provides some optimism that a gradual improvement in labor markets is again underway,” said Carrick.

“The next several weeks will be tense while it is determined which is the prevailing direction of change.”

To read Carrick’s full report, click here.

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