After three weeks of declines, the Labor Department reported that the number of people filing claims for unemployment benefits jumped by 12,000 to a seasonally adjusted level of 472,000. The news has economists worried that employers are not hiring people as much as hoped, which could slow the on-going economic recovery.
“This was indeed a disappointment,” said Adolfo Laurenti, deputy chief economist with Mesirow Financial. “The current level remains well above what is considered the trigger point for a more broad-based expansion in payrolls.”
In total, more than 4.5 million people are receiving unemployment benefits.
No Inflation Here
No worries about inflation any time soon according to the Commerce Department this morning. Prices in May fell 0.2 percent pushed down in large part because of a 5.2 percent drop in gasoline prices. Gas prices have fallen for the past five weeks.
“The good news is that consumer prices are going nowhere,” said Joel Naroff, president and chief economist with Naroff Economic Advisors. “The bad news is that it is the result of a tepid and uncertain recovery.”
BP continues to get whacked like a piñata, this time by Congress. A House oversight panel has started a hearing where BP CEO Tony Hayward is being asked questions about the ongoing oil spill in the Gulf of Mexico. TV news networks are covering the hearing using multiple windows. In one box on the screen, Hayward impassively listens to members of Congress criticize him and BP, while in another box, there are live pictures of the oil spewing deep in the Gulf. In opening statements, Rep. Joe Barton (R-TX) said the White House engaged in a “$20 billion shakedown” of BP after the company’s decision to create a fund to compensate victims of the oil spill after meeting with the President on Wednesday.
Mortgage Rates Still Near Record Lows
Real estate agents are always telling clients: “It’s never been a better time to buy a home,” and they may be right this time. Mortgage rates averaged 4.75 percent for a 30-year fixed-rate mortgage according to Freddie Mac. That’s a slight increase from the previous week, but still near the lowest on record set in December of last year. Rates have stayed low due to the European debt crisis which has pushed investors to buy U.S. Treasuries as a safer investment. That in turn has pushed down interest rates for Treasuries and mortgage rates which closely follow government interest rates.
Despite the low rates, however, most mortgage applications have been for refinancing and not new mortgages. The Mortgage Bankers Association reported on Wednesday that nearly three-quarters of all requests for mortgages last week were for refinancing.