Jobless claims surge
New weekly claims for unemployment benefits jumped past Wall Street estimates last week.
February 5, 2004: 8:53 AM EST
NEW YORK (CNN/Money) - New jobless claims rose in the United States last week, the government said Thursday, exceeding Wall Street expectations.
The Labor Department said 356,000 people filed new claims for state unemployment benefits in the week ended Jan. 31, compared with a revised 339,000 the prior week. Economists, on average, expected 340,000 new claims, according to Briefing.com.
The four-week moving average of new claims, which irons out the volatility of the weekly data, held steady at 345,250, the same as the prior week's revised number.
Continued claims, the number of people out of work for a week or more, was also unchanged, at 3.12 million for the week ended Jan. 24, the latest data available.
Separately, the Labor Department said non-farm productivity rose at a slower annualized rate in the fourth quarter than Wall Street expected. Since productivity is a measure of output per worker hour, slower productivity could mean more hiring.
On Wall Street, stock market futures were little changed after the report, pointing to a positive open. Treasury bond prices were slightly lower.
Though it usually takes a while for unemployment to fall once the economy's started growing again -- since employers are hesitant to start hiring until they believe the recovery is for real -- the United States has enjoyed eight straight quarters of growth, including the strongest performance in 20 years in the third quarter of 2003, without significant job creation.
In fact, since February 2001, just before the 2001 recession began, more than 2.4 million payroll jobs have been lost, according to the Labor Department, making this recession/recovery period the most "jobless" since World War II.
Several indicators have been pointing up for the job market, including a steady, if slow, decline in weekly jobless claims, leading many economists to forecast greater job growth this year.
But some economists worry that structural changes in the job market, including technological advances and a growing appetite for cheap offshore labor, will keep hiring muted in 2004.
The Labor Department should offer more insight into the debate on Friday, when it is scheduled to release its measures of unemployment and payroll growth in January. Economists, on average, expect unemployment to hold steady at 5.7 percent and for non-farm payrolls to grow by 165,000 jobs.
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