Economists Unfazed By Steep Rise In Jobless Claims
WASHINGTON (AP) _ The number of Americans applying the first time for unemployment benefits rose by 70,000 last week, but economists saw no cause for concern over the long-term job outlook.
While the report reflected the continuing instability of the nation’s job market, economists cautioned that it should not be taken too seriously because government statisticians have difficulty adjusting claims during holiday weeks. The latest reporting period occurred between the Christmas and New Year’s holidays.
The increase reported by the government Thursday was the steepest since July 1992, and the report showed the most initial claims filed since July 24, 1993. Economists had predicted a much more modest rise of about 24,000 from the previous week, when the number of initial claims unexpectedly dropped to near a five-year low.
″The Christmas holiday temporarily distorted jobless claims data during the past two weeks,″ Merrill Lynch said in a commentary on the report.
Donaldson, Lufkin & Jenrette Securities said it would ″advise waiting to see next week’s data before reaching any conclusions. We suspect strongly that next week’s data will register a significant decline.″
The report from the Labor Department came a day before the release of the December unemployment rate, which economists are expecting to rise modestly.
Labor Secretary Robert Reich said in a teleconference broadcast from Washington to an economic conference in Paris that he expected the nation’s nonfarm payrolls to rise by between 160,000 and 200,000 jobs. Reich sees the figures for the first time on the day they are released.
The Labor Department said a seasonally adjusted 363,000 people sought unemployment benefits for the first time in the week ended Jan. 1, up from a revised 293,000 the previous week. That figure initially was reported at 291,000. The previous week’s figure included the Christmas holiday, which economists said likely contributed to the decline.
Also up was the four-week moving average of initial jobless claims. That figure was 328,500, a more modest increase of 6,500 from the previous week’s revised average of 322,000. That figure, less volatile than the weekly number, is favored by economists as a more accurate measure of hiring trends.
Economists insisted that despite the wide fluctuations in initial jobless claims shown in Thursday’s report the job market is steadily improving, led by hiring among smaller companies.
For the week ended Dec. 25, 6,745 claims were filed in 47 states under a federal emergency employment program, an increase from 6,444 the previous week.
The numbers for both emergency claims and individual state claims lag behind the initial jobless claims total by a week.
For the week ended Dec. 25, California registered the biggest decline among states in the number of initial jobless claims. Fewer layoffs in the food processing industry helped reduce the number of initial claims there by 5,234. Other states leading the nation in declines were Alabama, 2,296; North Carolina, 1,662; Virginia, 1,653; and Florida, 1,205.
Leading the nation in increased claims were Ohio, 4,782; Wisconsin, 3,960; Texas, 3,028; Pennsylvania, 2,133; and Kentucky, 2,108. Layoffs in food processing, textiles and manufacturing helped boost the number of initial claims in those states.