Wholesale prices rise, as do jobless claims
WASHINGTON - A bit of sour news yesterday - on increased jobless claims and higher wholesale prices - suggested the economy is moving in fits and starts even as the recession eases.
WASHINGTON - A bit of sour news yesterday - on increased jobless claims and higher wholesale prices - suggested the economy is moving in fits and starts even as the recession eases.
Analysts said the pace of unemployment claims should ease after auto-industry layoffs are completed. Inflation, meanwhile, remains under control.
The number of new jobless claims rose to a seasonally adjusted 637,000 in the week that ended Saturday from 605,000 the previous week, the Labor Department said. That exceeded analysts' expectations of 610,000.
Economists noted that initial claims remain below a peak reached in late March - a sign that the wave of mass layoffs announced earlier this year likely has crested.
"This is yet more evidence that we are now past the worst," Paul Dales, U.S. economist at Capital Economics, wrote in a research note.
Separately, the department said wholesale prices climbed 0.3 percent last month, larger than the 0.1 percent gain economists had expected. The biggest jump in food costs in more than a year offset a second monthly decline in the price of energy products.
A 43.7 percent jump in egg prices helped drive food costs higher. The increase, the largest on record dating to 1992, was partly a onetime blip because Easter occurred in April, according to Labor Department economist Scott Sager. The same dynamic drove pork prices up 2.5 percent. The holiday was in March last year - meaning people bought Easter eggs and ham for their holiday dinner in March in 2008 and in April this year.
The overall 1.5 percent increase in food costs also represents a leveling off after food prices fell in four of the previous five months, economists said.
Even with the larger-than-expected gain in the Producer Price Index, wholesale prices over the last year have dropped 3.7 percent. That is the biggest 12-month decline since 1950.
Most of the increase in jobless claims was due to auto layoffs, a department analyst said. Economists estimate Chrysler L.L.C. has laid off 27,000 workers in the wake of its April 30 bankruptcy filing.
In another sign of weakness in the labor market, the tally of people who are continuing to receive jobless benefits rose to 6.56 million from 6.36 million. That was a record-high figure for the 15th straight week and was worse than analysts had expected. It shows the unemployed are having difficulty finding new jobs.
