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US unemployment claims fall
Drop in insurance claims raises hopes as US treasury secretary urges financial reform.
Last Modified: 18 Jun 2009 18:43 GMT
Millions have lost thier jobs in the US as a
recession continues to bite [EPA]

The number of people claiming unemployment insurance in the US has dropped for the first time since the beginning of the year, raising hopes that a recession there is easing.

Long-term claims fell by 148,000 to 6.687 million for the week ending June 6, the biggest drop for seven years, according to US labour department figures released on Tuesday.

However, weekly new jobless claims rose to a seasonally adjusted 608,000 for the week ending June 13 from an 605,000 claims from the previous week.

Analysts said that the long-term claims could point to an end to a crippling recession that has seen millions of Americans lose their jobs.

"This week's claims data provided among the clearest signals yet that labour market contraction is easing," Andrew Gledhill, an economist at Moody's Economy.com, said.

The new figures were announced as Tim Geithner, the US treasury secretary, urged congress to move quickly on the Obama administration's new financial reform proposals, saying that past efforts had started too late, after the will to act had subsided.

Geithner, in prepared testimony to the US senate banking committee, said the administration "decided that now is the time to pursue the essential reforms, those that address the core causes of the current crisis; and that will help to prevent or contain future crises".

New plans unveiled

Obama unveiled new plans on Wednesday for wide-ranging financial regulation reforms, including the creation of a national bank regulator and wider powers for the US Federal Reserve.

The plans aimed to combat the recession, which was sparked by the nation's sub-prime mortage crisis and the collapse of several high-profile US banks.

The Federal Reserve, the US central bank, is to be given new powers to stop companies jeopardising the entire US economy under the new proposals.

"The Federal Reserve is in the best position to play that role. It already supervises and regulates bank holding companies including all major US commercial and investment banks," Geithner said.

"Our plan is to give it a carefully designed,  modest amount of additional authority and clear accountability."

Source:
Agencies
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