More Americans filed for unemployment benefits than in previous weeks last week. 399,000 filed for unemployment claims, up from 375,000 the previous week and the highest in six weeks. This increase usually happens every year as companies let go of thousands of workers following the holiday sales season.
The Labor Department tries to take this into account, but usually can’t due to volatile data. The four-week average also jumped to 381,750. In the previous week that average hit a more than three year low. New unemployment claims below 375,000 typically reduce the unemployment rate as we saw in December when the rate fell to 8.5%. Last year the economy added about 1.6 million jobs, a 50% increase from 2009. According to a survey by the AP, economists are expecting the economy to add 1.9 million jobs this year.
Despite looking a little better in previous weeks, the jobs market has a long road to recovery. The recession in 2008 wiped out 8.7 million jobs and there are around 13 million unemployed people in the U.S. That doesn’t even count the millions who gave up looking for a job.
Plus, we have to take into account the state of the global economy which is shaky at best right now. The continued debt crisis in Europe and the inaction by euro countries to fix it is threatening to drag the entire world economy back into recession. Many economist believe that U.S. economic growth will suffer in the first half of this year as they see a recession in Europe as a foregone conclusion.