Stubborn unemployment must be tackled, OECD says

The head of the Organization for Economic Co-operation and Development is telling governments to do more about the problem of stubborn unemployment.

In a report released Thursday, the OECD said the risk of high unemployment becoming entrenched has increased with a steep rise in long-term joblessness.

"Of all the facets of the financial and economic crisis, high unemployment is the most visible manifestation of the challenge to restore sustained growth," OECD Secretary-General Angel Gurr?a said, calling it the "human face" of the economic crisis.

“Governments cannot stand still. The challenges of tackling high and persistent unemployment, improving job opportunities and ensuring adequate social safety nets should be at the top of the political agenda.”

The OECD noted that long-term unemployment in Canada is among the lowest in the group. Through the first three months of this year, about 13 per cent of the country's unemployed had spent more than a year hunting for work. That compared with an OECD average of almost 35 per cent.

Unemployment is expected to remain high among the 34 countries of the OECD with the job creation forecast to remain anemic in the near term, according to the group's report.

In mid-2011, the number of unemployed people in the OECD countries had declined to just over 44 million, but that was still more than 13 million higher than immediately before the crisis.

While the OECD said Canada's labour market is recovering faster than others, there is a risk that the recent faltering of the global recovery may temporarily slow the decline in unemployment in Canada back to its pre-crisis level

Last month, Canada's unemployment rate stood at 7.3 per cent as the country's lost 5,500 jobs.

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U.S. unemployment claims drop below 400,000

 Initial unemployment claims dipped to 398,000 last week -- their first time below the 400,000 level since April 2.

NEW YORK (CNNMoney) -- Finally, some better news about the job market: the number of first-time filers for unemployment benefits fell below 400,000 for the first time since early April.

There were 398,000 initial unemployment claims filed in the week ended July 23, the Labor Department said Thursday.

That marks the first time since April 2, that the weekly initial claims number has fallen below 400,000, a level typically associated with payroll growth and a lower unemployment rate.

It also beats the 415,000 claims economists surveyed by Briefing.com had expected, and was 24,000 lower than the previous week.

Earlier this year, it appeared initial claims were on a downward track. But they then hit a speedbump in April, as high oil prices, bad weather and Japan's tsunami started to weigh on businesses.

Now, although last week's data were slightly encouraging, economists are still hesistant to say initial claims are completely back on track, because the data can be volatile.

"It's way too early to tell," said Jennifer Lee, senior economist with BMO Capital Markets. "There's still so much uncertainty out there and economic growth is still very subpar. If it does continue to improve, it would be very moderate."

Earlier in the month, Minnesota's shutdown caused an upward blip in the numbers, but that proved only temporary after the state government passed a budget on July 20.

Overall, the four-week moving average of initial claims --calculated to smooth out volatility -- fell by 8,500 to 413,750 in the latest week.

Continuing claims -- which include people filing for the second week of benefits or more -- fell to 3,703,000 in the week ended July 16, the most recent data available. That was slightly more than economists' forecasts for 3,688,000.

The current unemployment rate is 9.2%. 

First Published: July 28, 2011: 8:44 AM ET

Quoting : CNN