New Figures Show Slight Improvement in US Jobless Picture

The number of new jobless claims continues to fall in the United States, while inflation remains low. The latest batch of economic data points to a slow recovery from a deep and prolonged recession.

The number of newly-laid off Americans filing for government unemployment benefits totaled 514,000 last week, down from 524,000 the previous week and more than 100,000 fewer than peak numbers reported earlier in the year. It was the fifth decline in new filings in the last six weeks, and shows that job losses, while still above average, are becoming less severe.

Global Insight economist Nariman Behravesh.

"The jobs market is very gradually on the mend, but still in somewhat-recession territory," Behravesh said. "We probably will not get out of it until early next year. Jobs recovery is always about six months behind the economic recovery, and the reason is very simple. Companies are reluctant to hire until they are fully-confident that the recovery is sustainable."

U.S. unemployment stands at 9.8 percent and is expected to go higher in coming months.

Meanwhile, consumer prices in the United States rose a modest 0.2 percent in September -- a sign that the recession's deflationary pressures have eased, but record-low interest rates and massive liquidity injections by the U.S. central bank have not generated an inflationary spike.

"I think the bottom-line message for the typical consumer is that the cost of what you are buying is not going to be rising very much," Behravesh said.

Overall, U.S. consumer prices have fallen by 1.3 percent over the last year. Because of the absence of inflation, the federal government has announced that 57 million American retirees will not receive a cost of living increase in their Social Security payments next year, something that has not happened in decades.

Economists say one key to a sustained economic expansion will be a recovery of America's beleaguered housing sector. But a private real estate monitoring group reports U.S. home foreclosure filings rose 5 percent in the third quarter of the year compared to the previous quarter.

Real estate analyst Rick Sharga says the housing picture will remain gloomy so long as unemployment stays high.

"What is exacerbating the problem now are rising levels of unemployment and underemployment," Sharga said.

It was a rash of mortgage defaults and home foreclosures that helped trigger last year's financial meltdown and credit crunch that battered an already-weak U.S. economy.