Americans Filing For Unemployment Rises

February 27th, 2009 by Reed Allmand

According to an article in the Star-Telegram, the number of jobless workers filing for unemployment has jumped to 667,000 unemployed workers from 631,000 last week. The number of job losses has put a total of 5.1 million unemployed workers onto unemployment insurance not counting those who received benefits extensions. Experts had expected unemployment claims to drop; but the job losses have increased not decreased in the past week.

The article said:

Nigel Gault, chief U.S. economist at the IHS Global Insight consulting firm, said: “We have been looking for signs that the economy’s rate of decline might be slowing, but can’t find any.”

The economy’s decline is not slowing and neither is the rate of job losses that are affecting over 5 million Americans. These job losses are expected to be longer term than most had hoped and many workers may never regain the level of employment and compensation they experienced during the boom years. As companies struggle to stop the bleeding and avoid bankruptcy, many are implementing job losses even if it means less innovation, expansion or customer value.

Companies are “becoming extremely cautious and … shelving their capital spending plans and working with the minimal possible work force,” said Zach Pandl, an economist at Normura Securities International.

This cautiousness has grave consequences for the American worker and every business that depends on the American worker. Unfortunately, this pattern of job losses and declining sales has become cyclical. Workers, fearful of losing their job or income cut back in spending. Companies see declining sales so they layoff workers, who in turn cut back spending, face foreclosures, skip bill payments and eventually file bankruptcy.