The latest numbers from the U.S. Department of Labor show a decrease in new unemployment filings for the weekend ending November 5th. There were 390,000 new claims for unemployment during the previous week, down from 400,000 the week before. However, many analysts argue that the number needs to drop significantly before national confidence in employer hiring is boosted.
The statistics come on the heels of a 0.1 percent drop in the nation’s official unemployment rate for the month of October. The average hourly wage earned by workers increased $0.05 while payroll employment was up by 80,000 during the same period.
An article published by USA Today on Thursday stated that employers announced more job openings during the month of September than any other month since late 2008 adding, “That’s a positive sign for future hiring, since most companies typically take one to three months to fill vacant positions.”
Unemployment Rate Remains Steady
The high unemployment rate facing Americans continues to weigh heavily on factors ranging from consumer sentiment to retail prices. With so many citizens seeking unemployment benefits, some fear a meek outlook for holiday shopping which could subsequently result in retailers unloading inventory for lower than desired prices. Without a significant decrease in jobless claims on a week-by-week basis, the country’s economy could remain sluggish through 2011 and into 2012.
Rick Meckler of the New York investment firm Liberty View Capital Management was quoted in a recent New York Times article stating that data “are not strong enough to make it clear that we are in a solid recovery but they are not weak enough to show that we are falling into a recession.” The article also cites the fact that salaries for Americans has not kept pace with inflation, which in turn creates more obstacles for consumer spending.
Oil Prices Surge, European Markets Move
BusinessWeek reported Thursday that oil prices increased to their highest prices in a three-month period on the updated new jobless claims figures. Rick Mueller of ESAI Energy LLC in Massachusetts was quoted in the article stating, “Folks are relieved a bit about economic news. The U.S. jobs numbers today were good and it looks like the Europeans are getting it together. The Italian situation has calmed down.”
Mueller was referring to recent Eurozone market turmoil following an announcement by Italian Prime Minister Silvio Berlusconi that he will resign once austerity measures have been approved for the European Union country. The move has sparked growing investor concerns that the sovereign debt crisis rooted in Greece could spread throughout Europe and possibly even the United States if they are not addressed.
In reaction to fears of a collapse, the International Monetary Fund, European Central Bank and others have announced plans to provide liquidity to struggling financial institutions while EU policy makers have promoted an increase in power to the European Financial Stability Facility (EFSF). If approved, the EFSF would be allowed to purchase sovereign debt in the form of bonds and then use them as collateral to provide additional funds to banks.
U.S. Trade Deficit Shrinks on China Imports Decrease
The Department of Labor also released trade numbers this week, showing that Chinese imports fell 2.5 percent for the month of September. A Reuters article on Thursday mentioned mounting U.S. government pressure on China to increase the value of its currency even more. The Chinese Yuan has appreciated over 4 percent year-over-year against the U.S. Dollar.
Referring to the reduced trade deficit, Millan Mulraine of TD Securities told the New York Post, “The economy is clearly regaining its footing. While global economic activity is slowing, it hasn’t collapsed, so the U.S. will be able to sustain healthy gains in exports. The deceleration in the pace of layoffs is positive for the outlook on consumer spending.”