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U.S. unemployment applications slip slightly

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The number of people seeking unemployment benefits dipped last week, but barely.

hs. The previous week's figure was revised upward from 398,000 to 401,000.

The four-week average, a less volatile figure, dropped for the fifth straight week to 407,750. That suggests there is a downward trend in layoffs.

Applications "have been grinding lower, and this week's result is at least not bad news, which at this point feels pretty good," said Robert Kavcic, an economist at BMO Capital markets, in an e-mail.

Stock futures fluctuated after the report was released before erasing earlier losses.

Applications have been at or above 400,000 for 17 weeks. They fell in February to 375,000, a level that signals healthier job growth. They stayed below 400,000 for two months. But applications then surged to an eight-month high of 478,000 in April and have declined slowly since then.

The report comes a day before the government will release the July employment figures. Economists forecast that Friday's report will show that employers added a net total of 90,000 jobs. The unemployment rate is expected to remain unchanged at 9.2 percent.

That would be an improvement from June, when the economy added just 18,000 jobs — the fewest in nine months. But at least three times as many new jobs are needed to substantially reduce the unemployment rate.

Many large companies have cut jobs in recent weeks. Pharmaceutical giant Merck & Co. said last week that it will eliminate 13,000 positions worldwide by 2015, about a third of them in the U.S.

Cisco Systems Inc., the world's largest maker of computer-networking gear, last month said it is eliminating 6,500 positions, or about 9 percent of its worldwide work force of 73,000. And Lockheed Martin said in June that it will cut 2,700 jobs.

Employers are pulling back as the economy struggles.

The economy grew at an annual rate of only 1.3 percent in the April-June period after barely expanding in the first three months of this year. Growth was less than 1 percent in the first half of the year, the weakest stretch since the recession officially ended.

Manufacturers expanded at their slowest pace in two years in July, a private trade group said Monday. The Institute for Supply Management also said that expansion among retailers, restaurants, financial services and service industries slowed to a 17-month low in July.

The two reports showed that there is little sign the economy is growing any faster in the July-September quarter than in the first half of this year.

A more cautious consumer is a key reason for the sluggish period. Americans cut their spending for the first time in 20 months in June, the government said Tuesday. For the entire April-June period, consumer spending rose only 0.1 percent, the worst showing since the recession ended.

Much of the slowdown stems from a spike in gas prices since last year. That has limited what consumers can spend on discretionary goods, such as furniture, electronics, and appliances. Spending on those categories has fallen for three straight months.

Manufacturing output has also been hit by supply disruptions that resulted from Japan's March 11 earthquake. Those disruptions caused auto companies in the U.S. to reduce production.

Economists had predicted the economy would turn around in the second half of the year once those temporary factors began to fade.

But many are now more pessimistic about the second half of this year. Goldman Sachs recently cut its estimate for growth in the July-September period to 2.5 percent from 3.25 percent. JPMorgan, meanwhile, has reduced its estimate to 1.5 percent, from as high as 3 percent several weeks ago.

Growth of about 2.5 percent is barely enough to reduce the unemployment rate. The economy would need to grow 5 percent for a whole year to bring down the rate by one percentage point.

The number of people receiving benefits rose 10,000, to 3.73 million. But that doesn't include millions of additional unemployed workers receiving extended benefits under emergency programs enacted during the recession. All told, 7.6 million people received unemployed benefits in the week ending July 16, the latest data available.

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  • unemployment
    unemployment is NOT going down....people are running out and therefore do not show on the statistics

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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