Top Financial News
05/03 08:45
U.S. Initial Jobless Claims Rose to 421,000 Last Week (Update1)
By The total number of people receiving jobless benefits rose by 38,000 to a five-year high of 2.682 million
Washington, May 3 (Bloomberg) -- The number of U.S. workers filing new claims for state unemployment benefits rose last week to the highest level in more than five years, a sign the economy may be weakening further, the government said.
Initial jobless claims rose by 9,000 to a level of 421,000 in the week ended April 28, the Labor Department said. That was the highest since 428,000 in the week ended March 23, 1996.
The four-week moving average of claims, which smoothes out volatility in the weekly number, rose to 404,500, the highest since October 1992, from 395,250. Companies are stepping up layoffs to maintain profits, suggesting unemployment may creep up as the economy struggles to rebound.
``The labor market continues to weaken,'' said Ryan Brecht, an economist at Standard & Poor's MMS in Belmont, California. ``If you have continued erosion in the labor market, that could affect consumers' willingness to spend. The risk is that the unemployment rate will rise through the second quarter.''
The release comes one day before the Labor Department issues its report on April employment. Analysts in a Bloomberg News survey project the jobless rate rose to 4.4 percent in April, the highest in two years, from 4.3 percent in March. The economy probably added 20,000 jobs after losing 86,000 the prior month.
The last time initial claims stayed above 400,000 for two straight weeks was September 1992, when the economy was emerging from its 1990-1991 recession. While the workforce was also smaller then, the acceleration in jobless applications is one reason Federal Reserve policy makers have lowered interest rates by 2 percentage points since the start of the year.
Jobless Rolls Increase
``The rise we seem to be seeing is judged as unwelcome by the Fed,'' said Avery Shenfeld, a senior economist at CIBC World Markets Inc. in Toronto.
Treasury securities rose after today's report, pushing the yield on the 10-year note down 4 basis points to 5.24 percent.
Analysts surveyed by Bloomberg News had expected initial jobless claims to fall to 400,000 last week from 408,000 originally reported for the prior week.
This year, jobless claims have averaged 365,765, up from the weekly average of 302,800 last year and the most since 407,800 in 1992. |
