Barack Obama focusing on job creation as US jobless rises

Washington: President Barack Obama is leaving behind scandal-focused Washington to focus on the country’s slowly improving jobs picture.

Obama is to fly by helicopter Friday about 64 kilometres north to Baltimore, which has had its share of tough times in the move from an industrial to service economy. But Maryland has experienced steady job growth so far this year as part of a nationwide economic recovery.

The White House said the trip is designed to focus on three areas of needed investment to grow the middle class — jobs, skills and opportunity.

The president plans to highlight one of the manufacturing companies still thriving in the city by speaking at Ellicott Dredges. It makes equipment for excavation under water and on beachfronts around the world.

The number of Americans seeking unemployment benefits rose 32,000 last week to a seasonally adjusted 360,000, the most since late March. The jump came a week after applications had reached a five-year low.

The less volatile four-week average rose just 1,250 to 339,250, the Labour Department said Thursday. That’s a level consistent with modest job gains.

“The underlying story in jobless claims continues to be one of gradual improvement,” said Julia Coronado, an economist at BNP Paribas.

Coronado said the small rise in applications “highlight(s) the need to take volatile weekly readings with a grain of salt.”

Spending cuts

Weekly applications are a proxy for layoffs. The big increase might mean companies are cutting more jobs, possibly because of steep government spending cuts that kicked in March 1.

Obama also plans to visit a community centre that provides job training to parents and an elementary school that provides early childhood education. Obama has proposed that public preschool be available for all 4-year-olds from low-income families.

At Ellicott Dredges, Obama was to announce that he signed a memorandum to cut timelines in half for the permit process for major federal infrastructure projects. The White House said it’s an important step in his goal of creating jobs by making urgent repairs to roads, bridges and railways.

The focus on Obama’s economic agenda comes at the end of a week that has been consumed by a trio of controversies. They include the targeting of conservative political groups by the Internal Revenue Service, the administration’s response to last year’s deadly attack on a US diplomatic facility in Benghazi, Libya, and the seizure of Associated Press phone records by the Justice Department as part of a leak investigation.

Obama’s turn to the economy comes in a state that added 4,700 jobs in March, according to preliminary data released last month by the US Labour Department’s Bureau of Labour Statistics. That marked Maryland’s fourth consecutive month of job growth. The Maryland Department of Labour, Licensing and Regulation says the state has recovered nearly 97 per cent of the jobs lost in the recession. Maryland’s unemployment rate held at 6.6 per cent in March.

“Last year, we had the best-rated job creation of any state in our region and we have very nearly recovered 100 percent of the jobs that we lost during the recession,” Maryland Gov. Martin O’Malley said at a bill-signing ceremony on Thursday.

Fewer layoffs

Applications tend to fluctuate sharply from week to week, and economists typically focus more on the four-week average. That average remains 9 per cent lower than it was six months ago.

The job market has improved over the past six months. The economy has added an average of 208,000 jobs a month since November. That’s up from only 138,000 a month in the previous six months.

Still, much of the job gains have come from fewer layoffs — not increased hiring. Layoffs fell in January to the lowest level on records dating back 12 years and have risen only modestly since then. Overall hiring remains far below pre-recession levels.

The unemployment rate has also fallen to a four-year low, although it remains high at 7.5 per cent.

The number of people receiving benefits fell 30,000 to 4.8 million in the week ended April 27, the latest data available. That’s down from 6.3 million a year ago. Some of those recipients have probably gotten jobs, but many have simply used up all their available benefits.

Companies may not be confident enough in the economic outlook to rapidly boost hiring. Some businesses may be concerned about the impact of the federal spending cuts and tax increases. An increase in Social Security taxes at the beginning of this year could slow consumer spending, which drives nearly two-thirds of economic activity.

Still, consumers appear to be shrugging off the tax hikes, helped by cheaper gas and steady job gains.

Consumer spending rose from January through March at the fastest rate in more than two years. And Americans boosted their spending at retailers in April, from cars and clothes to electronics and appliances.

Some analysts raised their growth forecasts for the April-June quarter after the April retail sales report. Even so, most expect growth has slowed to an annual rate of around 2 per cent, down from the 2.5 per cent growth rate reported for the January-March quarter.