Thursday, October 07, 2010

Jobless Claims Drop

From CNN Money:

The number of first-time filers for unemployment benefits fell to 445,000 in the week ended Oct. 2, down 11,000 from the week before, the Labor Department reported Thursday.

The number was lower than economists' forecasts of 455,000, according to consensus estimates by, but it still fell in a range that analysts say points to weakness in the job market.

and after a little bit of a tapdance, at the very end of the article:

On Friday, Wall Street will turn its attention to the government's monthly jobs report. Economists polled by forecast the report to show the economy added no jobs in September, and that the unemployment rate ticked up to 9.7% from 9.6% in August.

What they're trying hard not to come out and say is: while there was a slight drop in the numbers of folks who filed unemployment claims, the unemployment rate is still going up.

In other, related, bad news, cities in financial trouble are looking for state funds. From the NY Times:

Across the country, a growing number of towns, cities and other local governments are seeking refuge in similar havens that many states provide as alternatives to federal bankruptcy court. Pennsylvania will have 20 cities and smaller communities in its distressed-cities program if Harrisburg receives approval. Michigan has 37 in its program; New Jersey has seven; Illinois, Rhode Island and California each have at least one. This is on top of troubled housing, power and hospital authorities.

The increasingly common pleas for state assistance — after two relatively quiet decades — reflect the yawning local budget deficits that have appeared in the last two years.


Worse yet, the municipal requests for state assistance could spell problems for already beleaguered state finances. One head of a municipal bond trading desk at a major Wall Street firm said he worried more about problems bubbling up from the local level than he did about the possibility of a sudden state collapse.

If the downturn is prolonged and deep, and local governments fail to act aggressively, he said, dozens of small communities could be pushed into the arms of a state, weighing it down so much that it, too, would need a bailout. Something like that happened in Arkansas during the Great Depression, causing the only default by a state on general-obligation bonds in United States history.

Until jobs begin to appear in huge numbers, tax revenues are going to continue to drop, and demand for services will continue to rise. There doesn't seem to be any willingness on the part of the media or amongst our elected officials to acknowledge how desperate the situation really is, never mind propose any solutions.

cross-posted at MainSt/

1 comment:

DissedBelief said...

Again Susan, here you have touched upon an issue no one has touched with a barge pole. In fact, it may have been yesterday on NPR I listened to the response from one of the guests to a question from a listener. The response from the guest centered on the fact that states CANNOT declare bankruptcy etc. etc. I and some others threw up our hands in frustration. Right now we are experiencing the second wave of mortgage frauds, this time from robo signing and I predict we will see one or many states being forced to admit bankruptcy. California and Michigan may lead the way, but between escalating and high unemployment, homelessness and continuing bankruptcies, our nation may well be headed for a massive heart attack and it will take a radical by-pass to work through this one.