Bankruptcies, Jobless Claims Climbing Again

This morning we were treated to two more pieces of bad economic news. The first thing we learned is that weekly jobless claims reached a nine-month high... meaning the last time we saw weekly jobless claims this high was November of 2009.
http://www.msnbc.msn.com/id/38768775/ns/business-eye_on_the_economy

Employers appear to be laying off workers again as the economic recovery weakens. The number of people applying for unemployment benefits reached the half-million mark last week for the first time since November.

It was the third straight week that first-time jobless claims rose. The upward trend suggests the private sector may report a net loss of jobs in August for the first time this year.

Initial claims rose by 12,000 last week to 500,000, the Labor Department said Thursday.

Homebuilders and other construction firms are laying off more workers as the housing sector slumps after the expiration of a popular homebuyers' tax credit. State and local governments are also cutting jobs to close large budget gaps.

"The rise in initial jobless claims over the past three weeks makes it difficult to maintain confidence in the recovery and suggests the labor market is backtracking more than we first expected," Ryan Sweet, an economist at Moody's Analytics, wrote in a note to clients.

So much for the "Recovery Summer" that Democrats have been trying to convince us about.


And in other news, bankruptcy filings in the US have reached a five-year high... making this the period during "the great recession" where the most people have filed bankruptcies.
http://www.cnbc.com/id/38744090

U.S. bankruptcy filings have reached the highest level since 2005, government data released on Tuesday show, as the economy slows and the unemployment rate hovers just below double digits.

There were 422,061 bankruptcy filings between April and June, according to the Administrative Office of the U.S. Courts, up 9 percent from 388,148 in the prior three-month period, and up 11 percent from 381,073 a year earlier.

For the year ended June 30, there were 1.57 million bankruptcies, up 20 percent from 1.31 million a year earlier.

Consumer bankruptcies rose 21 percent to 1.51 million, and business bankruptcies rose 9 percent to 59,608.

Quarterly filings surpassed 400,000 for the first time since a record 667,431 bankruptcies were begun in the fourth quarter of 2005, when Congress overhauled federal bankruptcy laws and made it harder for people and businesses to file.

"We know the causes of bankruptcy are principally job losses and health care, with the overlay of the foreclosure crisis," said Deborah Thorne, an associate professor of sociology at Ohio University. "It feels very unsettled, and I'm not surprised the numbers are going up. Until we get our feet on the ground, provide decent-paying jobs, and do something with the housing crisis, bankruptcies will continue to go up."

That bankruptcy fillings are rising with the unemployment rate isn't surprising, really. There is a logical connection between employment status and the ability to pay bills. Oh, and forget the famous 9.5% unemployment rate. If we included all those unemployed people who stopped looking for work just this year, as we should, the unemployment rate would be 10.4%.

With both of these news reports hitting today, it's not surprising that the DOW is currently trading down 144 points from yesterday's closing.

Ignore the Democrats and their manic pride in this "Recovery Summer," folks. It's just not happening. What you're hearing from them is desperate hope and a severe disconnection from reality.