General Motors reports profits, but spike in jobless claims adds to gloom

General Motors reports profits, but spike in jobless claims adds to gloom

General Motors announced strong second quarter earnings on Thursday, providing a bright spot in a rocky economy.

Just a year after emerging from bankruptcy, GM reported revenue for the second quarter of $33.2 billion and earnings before interest and taxes of $2 billion. 

The company also announced that Ed Whitacre was stepping down as CEO immediately and as chairman at the end of the year. Whitacre was only with the company for a little more than a year. 

"My goal in coming to General Motors was to restore profitability, build a strong market position and position this iconic company for success," he said in a statement. "We are clearly on that path. A strong foundation is in place and I am comfortable with the timing of my decision."

GM’s positive earnings report was coupled with other more troubling news on the jobs front, which is weighing down Democratic hopes for retaining their majorities in Congress this fall.

Weekly jobless numbers released by the Labor Department on Thursday added to the sense of economic unease. The government reported that first-time claims for unemployment benefits reached a seasonally adjusted 484,000 last week, an increase of 2,000 from the week before.

First-time jobless claims have risen three of the past four weeks and are inching closer to the yearly high of 490,000, which was reached in January. The numbers indicate that businesses are still reluctant to hire despite modest growth in the economy this year.  

Stocks fell on the jobless data, with the Dow Jones Industrial average down nearly 70 points early Thursday morning.

Stocks dropped dramatically on Wednesday after the Federal Reserve gave a pessimistic outlook on the economy and announced it would not be easing off in its efforts to pump money into the struggling economy.

President Obama in recent weeks has touted the bailout of GM and Chrysler as a success. “For the first time in more than five years, the Big Three are operating at a profit,” he said Wednesday, “and the auto industry has added 76,000 jobs since last June — that’s the strongest period of job growth in more than 10 years.”

But a new poll from The Wall Street Journal and NBC underlined the fact that the struggling economy is hurting Obama with voters.

The poll found that nearly two-thirds of Americans believe the economy has yet to hit bottom, more than the 53 percent who felt that way in January.

A majority of those polled disapproved of Obama’s handling of the economy.

—Dustin Weaver contributed to this story.

This story was updated at 12:01 p.m.