According to the United States Department of Labor the agency that released its Initial Jobs Claim Report on June 14, 2012, the report was “disappointing.” The number of American workers filing unemployment claims rose by 6,000 to 386,000. Economists however prefer to look at the four-week average as it is a less volatile measure of jobless claims. It rose for the third straight week to 382,000, the highest it has been in six weeks.
When looking at unemployment numbers, the magic number for economists is 375,000 weekly applications. When initial claims drop below that number the experts believe that hiring is robust enough to drop the unemployment rate.
The six months of fall and winter saw unemployment applications steadily falling. However, they have since been flat.
In May, the unemployment rate hit 8.2 percent, the first rise in almost one year. Economists and the Federal Reserve blame the unexpected warm weather for the lower hiring rate that contributed to the rise in unemployment. Companies added jobs in January and February that they would have normally been filled during the spring and summer. However, as that weather related trend wans there is hope for job gains in the coming months. Ben Bernanke, Federal Reserve Chairman agrees with this assessment and said the hiring earlier in the year might have been “a catch-up in hiring.” Bernanke suggested that if that were true stronger economic growth was needed to increase hiring more. However, there was no suggestion that the Fed was prepared to make any moves yet.
Retail sales, which power the economy fell 0.2 percent in May according to the US Government. However, that reduction is misleading as a major reason for the decline was a reduction in oil prices that translated to a reduction in the price of gas. Gas dropped about $0.40 per gallon and economists predict that will free up cash for consumers to spend over the summer and boost the economy.
Bottom Line: The economy is expanding sluggishly, job creation is too slow, and jobless claims are flat. Consumers will have a bit more to spend over the summer due to reduced gas prices. In essence the economy is stalled.