If Barack Obama hoped that improving economic indicators would rescue his health-care plan, he will have to wait for at least another week to make that case. The Bureau of Labor Statistics reports that initial jobless claims increased last week to 558,000, up 4,000 from the previous week and 13,000 more than analysts predicted. The continuing massive job losses show that the economy still has a long way to go to reach the corner-turning point (via Instapundit and HA reader Desmond L):
The Labor Department says new claims increased to a seasonally adjusted 558,000, from 554,000 the previous week. Analysts expected new claims to drop to 545,000, according to Thomson Reuters.
The number of people remaining on the benefit rolls fell to 6.2 million from 6.34 million the previous week. Analysts had expected a slight decline.
The four-week average of initial claims, which smooths out fluctuations, rose by 8,500 to 565,000, after falling for six straight weeks.
The decline on the rolls results from the expiration of benefits, however, and not a new hiring impulse in the marketplace. With business shedding over a half-million jobs every week and now starting to rise again, the prospect for new jobs in any significant number looks bleak for the near term.
The retail numbers for July underscores that pessimism:
Retail sales outside of autos turned in a disappointing performance in July, underscoring concerns about the timing and durability of a recovery from the worst recession since World War II.
The Commerce Department said Thursday that retail sales fell 0.1 percent last month. Economists had expected a gain of 0.7 percent.
While autos, helped by the start of the Cash for Clunkers program, showed a 2.4 percent jump — the biggest in six months — there was widespread weakness elsewhere. Gasoline stations, department stores, electronics outlets and furniture stores all reported declines.
The Fed tried talking about a recovery yesterday, and the Obama administration has been salivating at the prospect of getting some good economic news. Instead, we seem to be stuck in a rut. While Germany and France have both shown GDP growth in Q2, the US economy declined an additional 1% in the same period. Unemployment began to slow a little earlier in the summer, but appears to be regaining its downward momentum again.
Why? The radical policies of the Obama administration has capital sidelined for the most part. Investors who saw the White House’s bullying tactics with GM and Chrysler bondholders have little incentive to jump into American markets. Those who see the coming takeovers of the health-care and energy-production sectors have no reason to invest in either. And with energy prices about to explode through the imposition of cap-and-trade, who would want to sink their money into start-ups and expansions now?
As long as Democrats insist on shoving radical, business-hostile legislation through Congress, expect this fibrillating stagnation in the American economy.