A look at jobless claims and food costs
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TEXT OF INTERVIEW
Bill Radke: We have a couple of new government reports on the economy just out this morning, and joining me to talk about them is Beth Ann Bovino, a senior economist at Standard & Poor’s in New York. Good morning, Beth Ann.
Beth Ann Bovino: Good morning.
Radke: So another 32,000 people filed their first unemployment claims last week. That’s a total of 637,000 — that’s more than economists were expecting. Continuing jobless claims — the people staying on unemployment — also jumped more than expected. We’re up to another record high. How bad is this news?
Bovino: Well, it’s another… It’s disappointing. That’s certainly for sure. We were expecting under 600. So, it doesn’t say that the jobs market is turning around. Right now we’re seeing unemployment at 8.9 percent and it’s going to climb.
Radke: Yeah, record high of more than 6.5 million continuing claims. How much of this is Chrysler and General Motors?
Bovino: That’s certainly a part of it and that’s going to continue. But one of the problems here is that right now the unemployment issue is pretty much widespread. Certainly the unemployment, basically the layoffs in the car companies is a factor, but it’s really not kind of across the board.
Radke: These new jobless claims had been dropping the last few weeks, that was part of this wave of optimism. How are you feeling now?
Bovino: Well, I mean, yeah there was certainly markets were a little bit more optimistic on the further it came down, but we hadn’t been expecting this to turn around in some time. I mean it is a lagging indicator after all.
Radke: Right. Now let’s turn to this other report out this morning. Wholesale prices rose more than expected in April. Big jump in food costs. How inflationary is this?
Bovino: Well the food costs certainly was a jump of about 1.5 percent, but that’s after two months of decline. So it did only partially offset the declines beforehand. The other news of that is that the core rate, excluding food and energy items, was still pretty tame. So it really does show that inflation still remains low.
Radke: Beth Ann Bovino is a senior economist at Standard & Poor’s in New York. Beth Ann, thanks.
Bovino: Sure, thanks.
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