The Labor Department said Thursday that the number of new jobless claims rose to 480,000 last week when many economists were hoping for a decline and a sign that the job losses would be improving soon.
But the rise in weekly claims of 7,000 last week, which had followed an increase of 19,000 the previous week, shows that the improvement has been halting. Analysts believe that claims need to fall to about 425,000 for several weeks to signal the economy is actually beginning to add jobs.
And it’s not just new unemployment claims that are unsettling some economists. The number of workers remaining on unemployment benefits (including emergency benefit extensions) has not fallen at all. A matter of fact, the number of people receiving ongoing unemployment benefits rose by 5,000 reaching a total of 5.19 million unemployed workers. And that’s not including workers receiving unemployment insurance benefits via extended state programs adding an additional 4.73 million Americans to unemployment figure. These figures indicate a definite negative trend in job creation. Our economy is losing more jobs than it is creating and if it does not reverse we could see more individual bankruptcies and even a few municipal bankruptcies in states that have been hit particularly hard by declining property tax revenues.
Job losses, foreclosures and a steady loss of property tax revenue have been the underlining factors in many municipalities’ inability to balance their budgets without cutting benefits to residents. Many states have even recently announced releasing prisoners early as their budgets for safety continue to shrink during this recession.