The number of people filing new claims for unemployment benefits dropped last week by 31,000, to 473,000, according to new data released Thursday by the U.S. Department of Labor.
Although the national unemployment rate remains high, the numbers come as somewhat of a relief. The previous week, new filings hit 500,000 (and have since been revised higher to 504,000). Last week’s news sent the stock market tumbling and caused even more chatter about the possibility of a double-dip recession.
Since then, each day has brought more sour economic news. Sales of existing homes dropped by 27.2 percent for the month of June, the lowest level since 1995, according to Tuesday’s data from the National Association of Realtors. The Commerce Department reported Wednesday that businesses were no longer spending as much on durable goods or large items such as equipment, and on Friday, the Commerce Department will release the revised estimates for the second-quarter gross domestic product. Like all of the economic data this week, those numbers also should be bad. Economists have estimated that the numbers will show the economy is growing at a rate of only 1.4 percent, when initially it was reported as growing 2.4 percent.
The week could end on an interesting note, as Federal Reserve Chairman Ben Bernanke delivers what is expected to be a much-watched speech at a conference hosted by the Federal Reserve Bank of Kansas City. Although the Federal Reserve announced in mid-August that it was planning to keep interest rates low and buy new Treasury securities, it did not propose any other policy plans.
What will Bernanke say, and what can he offer as the perception of deflation starts to march toward reality?