Claims for unemployment benefits skyrocketed last week to levels not seen for the last eight months.
The United States Department of Labor announced on Thursday that initial unemployment claims in the country had surged to a level not seen in eight months. The initial jobless claims for the week ending on Oct. 31 leaped by over 16,000 from the previous week. It is being seen as an abnormal spike in jobless claims that had been staying at historic lows of late.
For the week ending on Oct. 31, 276,000 people put in initial claims to receive unemployment benefits. This was the 35th week in a row that jobless claims in a week came in below the threshold of 300,000. The government as well as many analysts and economists see these numbers supporting the belief that the economy is fairly strong, according to Reuters. The Labor Department reported the numbers as being the highest recorded since last February.
The latest report on the employment outlook is due out on Friday. What is being observed is that businesses are not hiring but many companies still remain wary of layoffs. They don’t want to lose many of their skilled and experienced workers especially those companies in manufacturing and those relying on exports. The world economy has grown stagnant and both the manufacturing and export sectors have been hit hard by it.
Analysts are predicting that non-farm payrolls will rise this week to around 180,000 and that the government will maintain that the unemployment rate still hovers at 5.1 percent. The government, and other experts, believe that an unemployment rate in the 5 percent range is considered to be full employment.
People who continue to receive unemployment benefits rose last week by 17,000. This reflects the fact that there are currently 2.16 million Americans collecting unemployment benefits. Experts believe that the current trend of claims below the 300,000 threshold reflects that many long term unemployed people are finding work. The unemployment rate, however, doesn’t reflect those people who are underemployed or work only part time or those that have dropped out of the labor market and have given up looking for work. Were those factored in, the unemployment rate would likely be much higher than the reported 5.1 percent.
