Employment Outlook Stays Dim as Initial Unemployment Claims Rise

The Labor Department stated that initial claims for unemployment insurance increased last week to an adjusted half a million people.  The last time the figures were this high was back in November 2009.  Jobless claims shot up 12,000, to 500,000, relative to the previous week. Analysts had been expecting the seasonally adjusted claims to drop, but the economy had other plans.

The Labor Department had previously noted that 131,000 jobs were lost in July, and that June turned out to be weaker than previously noted. Private employers added 71,000 jobs; however, those were dwarfed by the 143,000 census workers whose jobs had ended.

Unemployment rate for July held at 9.5, primarily as a result of people giving up the search for work and no longer receiving unemployment benefits. All told, the economy has shed over eight million jobs during the recession. With the lack of improvement in the jobs sector, and the rising initial claims, concerns about production and economic growth are at an all time high, and this has been weighing heavily on Wall Street, resulting in the Dow Jones industrial average losing 144 points, or about 1.4 percent, to close at 10,271 on Friday.

Financial stocks, regarded as a bellwether, ended lower for the day, losing 2 percent.  With no positive news on the horizon, analysts are left wondering what catalyst might emerge to lift the markets in the weeks to come.