Quoted – Continued jobless claims drop 255,000; experts not optimistic

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The number of people collecting continued unemployment benefits dropped by 255,000 in the week ending June 5, the U.S. Department of Labor reported Thursday.

According to the report, 4.5 million people filed continued insurance claims for unemployment, the lowest level since December 2008.

Continued claims reflect people who file each week after their initial claim until the end of standard benefits, which usually last 26 weeks but have been repeatedly extended during the recession. The figures do not include people who have exhausted their benefits or stopped looking for work.

Initial jobless claims for benefits fell by 3,000 to 456,000 from last week’s revised figure of 459,000 claims. The number includes only initial or first-time claims made by laidoff workers.

Initial claims hit 597,000 one year ago and continued insured unemployment totaled 6.5 million.

“The economic growth numbers aren’t negative, but the recovery keeps slowing down,” said Scott Testa, assistant professor of business at Cabrini College in Philadelphia, Penn., in an interview. “It does help to some point that the government is providing so many Census jobs, but what we need to get out of this is good, full-time permanent jobs.”

Employers added 431,000 jobs in May, but 411,000 of those were temporary U.S. Census positions.

“Realistically, I don’t see a major uptick in private-sector hiring until around January 2011,” Testa said.

On a state-by-state basis, Illinois was among the highest in initial claims with 909 new claims. Florida, California, Arizona and Georgia saw the biggest increase with more than 1,000 new claims.

Layoffs in Florida among several industries drove up new claims by 3,460.

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Quoted – Consumer confidence index reaches high, signaling economic recovery

Consumer confidence has reached its highest level since September 2008, another sign that the economic recovery is underway.

The Conference Board Inc.’s Consumer Confidence Index rose  5.6 points in April to 57.9 from 52.3 in March. The survey uses 1985 as a base year of 100.

It’s good news for everyone from homebuilders to store owners because higher confidence should result in more sales and consumer spending accounts for about 70 percent of gross domestic product.

The persons polled who said business conditions are “good” rose to 9.1 percent from 8.5 percent a month  earlier, while those who said business conditions are “bad” declined only slightly to 40.2 percent from 42.1 percent.

The economy has been helped by tax relief legislation, said Scott Testa, an economics professor of Cabrini College in Philadelphia. “This is the first time home-buyers assistance from the federal government has driven the economy.”

Psychologically, people feel the economy is at the tail end of this recession, Testa said. “We’ve seen other numbers in check such as inflation and the sentiment is certainly more positive than it was a year and a half ago. People are less afraid of losing their jobs,” he said.

Consumers’ outlook improved from March. Those anticipating improved business conditions over the next six months increased to 19.8 percent from 18.0 percent.

The rising Consumer Confidence Index runs counter to a preliminary report on consumer sentiment released by the University of Michigan, based on a survey conducted in  mid-April, showing that sentiment declined from March to April.

While the two surveys ask similar questions, the sentiment survey is conducted via phone, while the confidence survey is conducted with written questionnaires given to more people. The full consumer sentiment report will be released Friday.

“There may not be a very statistically significant difference between last month and this month, there’s a lot of noise from month to month,” Barsky said.

The survey also suggests that while consumers are more optimistic about the job outlook, the proportion of consumers expecting an increase in incomes declined to 10.3 from 10.8 percent.

“I don’t know anyone who has received a pay increase,” Compall said.

People are still nervous, Testa said. “The big lagging indicator in any economy is usually the unemployment rate and it still hasn’t moved that much. Those indicators make people generally hesitant in some ways.”

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