Some good news, if it could be called that, came out in the business media this week. First, the Commerce Department revised downward its estimate of the GDP growth for the first quarter of this year from negative 5.7 percent to negative 5.5 percent. The economy didn't collapse as badly in the first three months of this year as first thought.
Second, an industry-wide index of manufacturing activity grew at a faster rate than expected. According to media reports, the manufacturing index grew to 42.8 in the month of May, exceeding April's reading of 40.1. Still, experts point out that a reading below 50 indicates contraction of the manufacturing sector. The index bottomed out at 23.1 in December 2008. A second survey of manufacturers also revealed a higher than expected growth in new orders in the month of May.
These glimmers of economic hope were overshadowed, however, by this week's new jobless numbers. According to Department of Labor statistics released today, June 25th, initial jobless claims for unemployment benefits for the week ending June 20th increased over the previous week by 15,000 to 627,000. This means that 627,000 newly laid-off people filed for unemployment benefits during that week. This week's numbers put the moving four-week average up by about 500, the DOL reported.
By comparison, in November 2007, the month prior to the official beginning of the recession, the weekly average of new jobless claims stood at just over 325,000.
The DOL also reported that 6.73 million people received unemployment benefits during the week ending June 13th, an increase of 29,000 over the previous week. Over the previous month, that number had grown slightly.
According to the DOL figures released June 5, the unemployment rate jumped five-tenths of a point to 9.4 percent in the month of May, slightly higher than economists predicted. The bright spot, if it could be called such, was that the loss of 345,000 jobs in that month is only about half the average monthly decline over the previous six months.
The number of unemployed workers jumped by 787,000 to 14.5 million in the month of May, a rise of 7 million since the beginning of the recession in December 2007.
Accurately sensing a growing anxiety among Americans that an economic turnaround hasn't been swift enough, the Obama administration this month made a strong push to announce the speed up of economic stimulus projects. On the heels of the news that the US economy shed another 345,000 jobs in May, adding to the nearly 6 million jobs lost since the beginning of the recession in December 2007, President Obama said that the next phase of the economic stimulus package will create 600,000 jobs in the next couple of months.
The worsening jobs picture prompted the AFL-CIO to launch a new Web site, Unemployment Lifeline, designed to help unemployed workers find the resources they need to survive in the recession. The site provides information on local aid for unemployment compensation benefits, child care, medical care, utility assistance and more. It also links workers to political action on such issues as passing the Employee Free Choice Act, universal health care reform and more.
AFL-CIO President John Sweeney called for sweeping action in a press statement. "We also must make broad-based economic changes to have sustained economic growth and an economy that works for everyone," he stated. "We must deal with our country’s unsustainable trade deficit. We must reform our financial regulatory system to provide more transparency and government oversight and regulation. And we must pass the Employee Free Choice Act so workers can win the freedom to form unions and bargain collectively with their employers for fair wages, security and benefits."
The continuing bad jobs news has some calling for a second stimulus package, including a second expansion of unemployment benefits and anti-poverty measures, new funds for public works projects, investments in the conversion of shuttered auto plants to green economy productions (solar panels, wind turbines, etc.), and more relief for state and local budget shortfalls.
