Jobless Claims Climb 11.8 Percent to 589,000

First time applications for state unemployment benefits for the week ending Jan. 17 climbed 11.76 percent to a seasonally-adjusted 589,000 from the week before, according to data released Thursday by the U.S. Department of Labor. The four-week moving average showed a slight increase to 4,559,750. The number of individuals collecting benefits through unemployment insurance increased 97,000 to a seasonally-adjusted 4,607,000 for the week. However, the unemployment rate for workers with unemployment insurance held steady at 3.4 percent. Overall jobless claims may be on the rise, but mortgage job losses have actually eased 25 percent in the fourth quarter, according to employment data tracked by Annual migration out of real estate also dropped by more than half, according to the data. “Federal Reserve purchases of mortgage-backed securities have recently pushed mortgage rates to record lows — fueling refinance demand,” said publisher Sam Garcia. “In addition to an increase in the number of mortgage firms hiring, we have reported on at least one temporary employment agency seeking to fill thousands of positions.” Other markets don’t seem to show the optimism has for the mortgage industry. The technology industry in particular has been hurting from decreased consumer spending in the face of financial hardship. Microsoft Corp. (MSFT) announced Thursday in an earnings statement that it would eliminate up to 5,000 jobs in the course of the next 18 months — including 1,400 jobs Thursday — because, as CEO Steve Ballmer put it in the report, the company is “not immune to the effects of the economy.” Sony Corp. (SNE) is also reeling with quarterly losses and has been reported by Reuters as considering aggressive “restructuring” plans, including an initiative to cut 16,000 regular and contract jobs globally. It’s unclear now whether President Barack Obama’s forthcoming economic stimulus plan will have a reversing effect on the rising jobless claims and dismal economic outlooks. The more than $800 billion package will still have to clear a few hurdles before anyone can be sure what effect it will have. Wire reports circulating late Thursday warned of GOP resistance to the bill and even some criticism from House Democrats who said the plan will not do enough to brace up the economy or create jobs. Write to Diana Golobay at Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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