U.S. jobless claims rise to highest level this year -
Thursday, March 16, 2006 2:13:20 PM
afxpress.com
WASHINGTON (AFX) -- New applications for state unemployment benefits rose by 5,000 to 309,000 in the week ending March 11, the highest level since December, the Labor Department said Thursday
Initial claims have risen three weeks in a row and five of the past six weeks since hitting a six-year low of 273,000 in late January
The four-week average of new claims, which strips out one-time events such as holidays and weather, rose by 5,750 to 296,500, the highest since the second week of January. Economists have been hopeful that jobless claims had reached a new plateau just under 300,000 after averaging around 320,000 for most of 2005. Economists polled by MarketWatch expected claims to fall to about 300,000. With initial claims now drifting higher, it's possible the low levels in January and February were due more to favorable weather than to a fundamental improvement in the labor market
Meanwhile, the number of people continuing to collect unemployment benefits fell by 49,000 to 2.45 million, the lowest since Feb. 10, 2001
The four-week average of continuing claims fell by about 15,000 to 2.48 million, also the lowest since February 2001
The insured unemployment rate - the percentage of all covered workers who are receiving benefits - remained at 1.9%
Initial claims are down about 8% since this time last year. Continuing claims are down about 7%
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs. Economists say the new low in continuing claims indicates the labor market is still strengthening. With the unemployment rate at 4.8%, Federal Reserve officials are concerned that tight labor markets will translate into higher wages and thus into higher prices for almost everything
The Fed is expected to raise overnight interest rates by a quarter percentage points to 4.75% at its March 28 meeting and again at the May 10 meeting. Critics of further Fed tightening say the low unemployment rate masks considerable slack in the labor market, with the employment participation rate stuck at 66.1%, more than percentage point below the pre-recession peak
The number of long-term unemployed people remains stubbornly high after four years of expansion. The percentage of unemployed workers who've been out of work longer than 27 weeks rose to 19% in February. The median duration of unemployment rose to 8.9 weeks
In a separate report, the Labor Department said the consumer price index increased 0.1%. The core CPI also increased 0.1%, a ticker lower than expected. In a separate report, the Commerce Department said housing starts slowed as expected in February to a 2.12 million annual pace from a 32-year high in January |
