Weekly unemployment claims decrease in Illinois, economists remain cautious

Initial jobless claims nationwide fell 14,000 to a seasonally adjusted 631,000 last week, the U.S. Department of Labor announced Thursday. The four-week moving average was 637,250.

Illinois reported 3,803 fewer layoffs for some of its major industries, including construction and manufacturing. It trailed only Pennsylvania and Florida in decreased layoffs last week.

Economists are not celebrating last week’s drop-off.

“Everyone is looking for shoots of green, but labor markets are still very challenged at this point,” Rick Mattoon, senior economist at the Federal Reserve Bank of Chicago, said. “It’s hard to be too optimistic.”

With Thursday’s news that Chrysler LLC plans to file for bankruptcy, Mattoon said the “big question on the manufacturing side is probably going to be what happens with the autos.”

“Six-hundred [thousand] is still really high,” Michael Miller, a DePaul University economics professor, said. “While the trend is in the right direction and maybe the worst is behind us, it doesn’t mean we’re not still going to have a lot of pain.”

Illinois’ relatively good week did not slow the flow of out-of-work applicants at The Chicago Hire Company, an administrative employment agency. Owner Jessica Kraft said numbers were up last week.

“We are still seeing people laid off from their company everyday come in, whether they’d been there one year or five years,” Kraft said. “I think that [last week] was just maybe a fluke.”

Jobless claims last week were up 66 percent from a year ago, when there were 378,000. The seasonally adjusted insured unemployment claims were more than six million, or 4.7 percent, doubling the 2.3 percent from a year ago.

Separately, workers wages rose .3 percent for the three months ended March 31, down 57 percent from the year-earlier period, according to the Bureau of Labor Statistics employment cost index report released Thursday.

Wages “slowed dramatically” for the year ended March 31, increasing 2.1 percent, down from the 3.3-percent increase for the year earlier period, according to the ECI report.

“What this is telling us is that there is no pressure at all within the labor market where workers can demand higher wages,” Miller said. “That’s no surprise when unemployment is raging the way it is.”

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