Jobless claims highest since June
Claims are still way over 400,000. These first time filers can expect to be unemployed for more than a year.
Jobless claims climbed by 11,000 to 428,000 in the week ended Sept. 10 that included the Labor Day holiday, figures from the Labor Department showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 411,000, according to the median forecast.
Bank of America Corp. (BAC) and Cisco Systems Inc. are among companies planning to keep trimming payrolls, raising the risk that consumer spending will stagnate. Signs the labor market is struggling to gain traction puts more pressure on President Barack Obama, lawmakers and the Federal Reserve for additional steps to spur the economy.
"Job growth is moving sideways, which is problematic," said Ryan Sweet, a senior economist at Moody's Analytics Inc. in West Chester, Pennsylvania. "We really need the labor market to improve to generate the wages to support consumer spending."
Consumers are actually paying down debt in anticipation of hard times ahead. And businesses can't justify adding people to the jobs rolls as long as consumers keep their money rather than spend it - especially on big ticket items like homes, cars, and appliances.
The "Summer of Recovery Part II" is now history. The Winter of our Discontent is nigh.