New Job Loss Claims Reach 500,000, Highest in Nine Months

The economy looks to be falling back into recession mode.  Last week, the most recent first time unemployment benefits claims were released, and the numbers were not a welcome sight.  First time job loss benefit claims climbed to over 500,000 in the month of July, the largest number of claims since 509,000 claims were made in November of last year.

The unemployment claims news, combined with a less than optimistic report coming out of the Federal Reserve, did little to boost the confidence Wall Street showed in the economy.  The day the news was announced investors helped push the Dow Jones down by 144.33 points, closing it at 10,271.21.

Duke University economist Campbell Harvey, pointed out the obvious when he stated that it did not matter what people were calling the recession, the fact of the matter is that the economy is not improving, and not producing new jobs.  The number of initial benefits claims had been falling since reaching a peak of 651,000 claims made in March of 2009.  In February the job losses claims reached a low of 439,000 but has been inching up ever since. 

Part of the fear comes from the fact that unemployment claims have been increasing rapidly over the past three weeks.  More concerns arose when the Philadelphia Federal Reserve announced that manufacturing activity in the Mid-Atlantic area of the country had dropped in August.  It was the first reported decline in manufacturing activity for the area in a year.

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