U.S. Initial Jobless Claims Rose 22,000 to 378,000  

As reported in Bloomberg .com

March 20 (Bloomberg) — The number of Americans filing first-time claims for unemployment insurance rose last week and the total number on benefit rolls reached the highest since August 2004, signs that firings are increasing.

Initial claims for benefits increased 22,000 to 378,000 in the week ended March 15, more than economists forecast and the highest since the week of Jan. 26, from 356,000 the prior week, the Labor Department said in Washington. The number of people staying on benefits rose to 2.865 million from 2.833 million.

U.S. companies are cutting staff as the biggest housing slump in a quarter century, tighter credit and mounting financial losses push the economy toward a recession. The Federal Reserve, noting labor markets had “softened” as it cut interest rates earlier this week, said it would act “as needed” to promote growth.

“This is pretty much what it looks like heading into recession,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York, said in an interview with Bloomberg Television. “It’s a bad number for the Fed. This is something that might keep them cutting rates.”

Treasuries were little changed after the report, with the benchmark 10-year note yielding 3.33 percent.

Weekly claims were forecast to rise to 360,000 from 353,000 initially reported in the prior week, according to the median projection of 39 economists in a Bloomberg News survey. Estimates ranged from 345,000 to 380,000.

From a company’s perspective

Many companies look to firing or laying off employees to address a downfall in the economy. This may address an immediate need but many fail to realize that this decision lives with them for 4 years.

First, if an employee collects, the payments will be paid out of the State mandated company’s account. The state unemployment programs are set up to mirror that each company has their own checking account.

The state assigns a rate that tells you how much will be put into the account and then notifies you how much has been paid out in claims.

The amount paid out directly affects the balance or reserves held in the account and have a direct relationship in determining what your rate will be over the next 4 years. The state makes a calculation based on the dollar amount of claims paid out, the reserves needed to support future claims as they relate to the taxable wage base.

 Confused yet?

That is the way the states want you to view it.

Should you have any questions about the unemployment or claim process, feel free to contact us. We deal with these issues on a daily basis.

george@hbsadvantage.com

We find many clients have been assigned the wrong rate and our overpaying unemployment taxes.

To learn more visit our website.

www.hbsadvantage.com

We look forward to discussing this with you.