By Don Lee, Tribune Washington Bureau –
WASHINGTON — New jobless claims edged down last week, but the good news was tempered by another upward revision of data for the prior week. The upshot is that initial filings for jobless benefits, an indicator of layoffs, remain at high levels for the year, according to Labor Department figures.
Separately, the government reported Thursday its third and final reading of the nation’s economic output for the first quarter — the same disappointing number that it issued a month ago. Gross domestic product, the sum of all goods and services produced inside the nation, rose at a 1.9 percent annual rate in the first three months of this year, down from 3 percent in last year’s fourth quarter.
With turmoil in Europe and slower growth in big emerging economies such as China, the current second quarter isn’t looking any better. Many analysts see GDP in the U.S. rising about 2 percent — a pace considered too weak to bring down the 8.2 percent unemployment rate.
Thursday’s GDP report from the Commerce Department showed the first-quarter slowdown coming mainly from weaker investments. Government cutbacks continued to be a big drag on growth. Corporate profits saw the smallest gain in three years.
Slow GDP growth doesn’t bode well for the job market. Unless economic demand picks up or the outlook strengthens, employers aren’t likely to step up their hiring. Job growth averaged 253,000 a month between December and February, but has since fallen to an average monthly gain of 97,000 between March and May. The June jobs report will be released July 6.
Initial jobless claims don’t reflect hiring activity but layoffs. But these data have been consistent with the spring slowdown in employment growth. Last week, there were 386,000 first-time claims for unemployment benefits.
While that was down 6,000 from a revised 392,000 in the prior week, the latest tally remains well above the low 360,000 levels seen in February and March. Since then, jobless filings have generally risen or moved sideways.