WASHINGTON (AP) -- Initial claims for unemployment benefits rose last week for the second time in three weeks. At the same time, more than a million people have lost benefits and more could be cut off now that Congress has failed to extend federal jobless aid. New claims for benefits jumped by 13,000 to a seasonally adjusted 472,000, the...
In this photo taken June 28, Talia Dashow, right, with Mary Kay cosmetics explains sales opportunities during a National Career Fair in San Francisco. Initial claims for unemployment benefits rose for the second time in three weeks last week, a sign that layoffs are rising.WASHINGTON (AP) -- Initial claims for unemployment benefits rose last week for the second time in three weeks. At the same time, more than a million people have lost benefits and more could be cut off now that Congress has failed to extend federal jobless aid.
New claims for benefits jumped by 13,000 to a seasonally adjusted 472,000, the Labor Department said Thursday The four-week average, which smooths fluctuations, rose to 466,500, its highest level since March.
Claims have remained stuck above 450,000 since the beginning of the year. That has heightened concerns among economists that jobs remain scarce even as the economy has begun to recover from the worst recession since the 1930s.
"We find the level and direction in jobless claims somewhat troubling and the increase is likely to feed double-dip fears," said John Ryding, an economist at RDQ Economics in a note to clients.
The economy received more bad news on Thursday when two reports showed the housing industry is struggling now that government tax credits for homebuyers have expired.
Still, the biggest problem for the recovery remains the number of people who are unemployed. Adding to that is the growing number of people who stand to lose government support while they search for work.
More than 1.3 million laid-off workers won't get their unemployment benefits reinstated before lawmakers go on a weeklong vacation for Independence Day. The numbers could reach 3.3 million by the end of this month if they don't pass the extension, the Labor Department said.
For the third time in as many weeks, Senate Republicans blocked a bill Wednesday night that would have continued unemployment checks to people who have been laid off for long stretches. The House is slated to vote on a similar measure Thursday, though the Senate's action renders the vote a futile gesture as Congress prepares to depart Washington for its holiday recess.
During the recession, Congress added up to 73 weeks of extra benefits on top of the 26 weeks typically provided by states. Democrats in the House and Senate want them extended through November. Republicans want the $34 billion cost of the bill to be paid for with money remaining from last year's stimulus package. Democrats argue that it is emergency spending and should be added to the deficit.
Some economists say they may revise their forecasts for growth in the third quarter if the benefits are not extended.
"People whose benefits are going to run out will simply not have the spending power necessary to help drive growth," said Dan Greenhaus, chief economic strategist at Miller Tabak.