Unemployment Through The Roof, Stock Market Tanks
Aug 18, 2011 Comments Off Pat Dollard
NEW YORK (AP) — Stocks are plunging on more signs of economic weakness.
The government says more people filed for unemployment benefits last week than were expected. And there are signs that inflation is rising — consumers paid more last month for gasoline, food and clothes.
The Dow Jones industrial average at one point was down more than 500 points. It’s now down 436 at 10,973. All the major market indexes are down more than 4 percent.
Asian markets started the worldwide drop. Japan’s Nikkei 225 index fell 1.3 percent after the country said its exports fell 3.3 percent in July from a year earlier.
Thursday’s drop in stocks marks a return to the volatility that sent the market plunging the first two weeks of August.
More Americans than forecast filed applications for unemployment benefits last week, signaling the labor market is struggling two years into the economic recovery.
Jobless claims climbed by 9,000 to 408,000 in the week ended Aug. 13, the highest in a month, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a rise in claims to 400,000, according to the median forecast. The number of people on unemployment benefit rolls rose, while those receiving extended payments fell.
Companies like Bank of New York Mellon Corp. (BK) are paring staff, one reason consumers are limiting their spending, which accounts for about 70 percent of the economy. Unemployment at 9.1 percent helps explain why Federal Reserve policy makers last week pledged to hold interest rates at a record low until at least mid-2013 to spur growth.
“People continue to get laid off,” David Semmens, a U.S. economist at Standard Chartered Bank in New York, said before the report. “The uncertainty in the economic outlook is continuing to give hiring managers sleepless nights and is keeping businesses from expanding. We have an incredibly long way to go” to get a healthy labor market, Semmens said.
