Unemployment compensation will be drastically cut back to only 26 weeks for people who lose their jobs starting July 1. The federal unemployment extension runs out at the end of this year and it is unlikely to be renewed. Our federal government has no money and realizes that the $109 billion spent for unemployment benefits from 2008 through 2010 only discouraged people from finding new work.
For all of the state workers getting permanent pink slips when the new fiscal year starts on July 1, this is not welcome news. We can be sure that unemployment and the economy will be the campaign issues in 2012. The news today concerning unemployment is not good as initial jobless claims “unexpectedly rose” last week. Consumer confidence, energy prices and food prices were the main reasons given for businesses not hiring people and reducing existing staff. I have another reason for not wanting to expand my business: I have no confidence in the government’s policies (health care, taxes and regulatory mandates) to be able to make business decisions for equipment purchases and staffing.
The following excerpt gives a good overview of the unemployment news.
U.S. initial jobless claims unexpectedly rose last week, a sign that the labor market is struggling to gain traction.
Jobless claims increased by 1,000 to 427,000 in the week ended June 4, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 419,000, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments decreased.
Some employers are cutting staff as demand slows because of elevated energy prices, falling house prices and tight credit. The economy generated the fewest jobs in May in eight months and the unemployment rate rose, a report showed last week.
It was the ninth consecutive week that claims were above 400,000. They reached a two-year low of 375,000 in February.
Housing prices in 20 major cities dropped in March to the lowest level since 2003, according to data from S&P/Case Shiller released last month. Declining home values weigh on consumer confidence and curb the household spending that makes up 70 percent of the economy.
The number of people continuing to receive jobless benefits fell by 71,000 in the week ended May 28 to 3.68 million.
Initial jobless claims reflect weekly firings and tend to fall as job growth — measured by the monthly non-farm payrolls report — accelerates.
Some employers are still considering possible cuts to their workforce.
Morgan Stanley (MS), owner of the world’s largest brokerage, may eliminate more jobs at its wealth management unit as Barclays Capital cuts positions in its equities division worldwide.
Barclays Capital, the investment-banking unit of London-based Barclays Plc (BARC), cut as many as 50 jobs in its equities unit, a person familiar with the matter said.