U.S. Initial Jobless Claims Rose 16,000 Last Week to 442,000
June 5 (Bloomberg) -- U.S. initial filings for state unemployment benefits unexpectedly rose last week as companies trimmed payrolls to hold down costs, government figures showed.
States received a seasonally adjusted 442,000 new applications for jobless insurance in the week that ended Saturday, up from a revised 426,000 in the prior week, the Labor Department said. The government attributed part of the rise to its seasonal adjustment process for the Memorial Day holiday.
The four-week moving average of claims, a less volatile measure, increased to 430,500 from 427,500 the prior week, suggesting the pace of firings has yet to slow. The U.S. lost more than a half-million jobs from February through April as companies reined in costs. A lack of job growth may restrain consumer spending, which accounts for 70 percent of the economy.
``The more layoffs we get, the longer the ride until we see stronger growth in the economy,'' said Tim Rogers, chief economist at Briefing.com in Boston, before the report. Some economists consider claims above 400,000 a sign of a weak labor market.
The government had been anticipating a larger decline in unadjusted claims during the week of the Memorial Day holiday.
``We were expecting a 7 percent drop'' in filings during the holiday week, ``but we actually got a drop of around 3.5 percent,'' said Tom Stengle, a Labor Department official. So, the seasonally adjusted figure rose during the week.
Economists surveyed by Bloomberg News expected the number of initial claims to decline to 420,000 from the previous week's initially reported 424,000, based on the median of 40 estimates.
Continuing Claims
The number of people still on jobless benefit rolls fell in the week that ended May 24 to 3.705 million from 3.723 million a week earlier.
The insured employment rate, which tends to track the U.S. jobless rate, held at 2.9 percent. The Labor Department also said 26 states and territories reported increases in new claims, while 26 reported decreases. One had no change.
Investments made in the last decade have helped companies be more productive while keeping a lid on payrolls. U.S. productivity grew almost three times faster in the first quarter than in the previous three months, revised data from the Labor Department showed yesterday.
The rise in efficiency came at the expense of more than a quarter million jobs cuts during the three months. Tomorrow, the Labor Department is expected by economists to report that the jobless rate in May increased to 6.1 percent, while the economy lost 30,000 jobs.
Greenspan
Speaking to an international monetary conference in Berlin on Tuesday, Federal Reserve Chairman Alan Greenspan called the U.S. labor market ``exceptionally weak.'' He also said the $330 billion in tax cuts passed by Congress last month may give Americans the fuel to increase spending in the second half.
La-Z-Boy Inc., the largest U.S. home furniture maker, on Tuesday said it will close plants in Tennessee and North Carolina and cut 405 jobs as sales slow amid declining consumer demand. The Monroe, Michigan-based company said production will shift to other plants, adding back 75 jobs in those locations.
On Monday, WestPoint Stevens Inc., one of the largest U.S. makers of towels and bedding, filed for bankruptcy protection. The West Point, Georgia-based company, which makes Ralph Lauren Home, Martha Stewart and Joe Boxer bedding and bath products, said in April it would shut two plants and a distribution center by the end of June and fire about 320 workers.
Other recent data have signaled the recovery may be starting to strengthen and with it, the labor market may follow. Service industries, the largest part of the economy, expanded in May for a second straight month, the Institute for Supply Management reported yesterday. The group's manufacturing survey also showed improvement.
Planned Firings
``In order to get anywhere close to the type of increases that economists are forecasting for July, August and September on average, the monthly data -- indeed the weekly data -- have got to start moving in a positive direction fairly quickly,'' Greenspan said.
The rate of planned firings is beginning to ebb, according to a private survey. U.S. employers in May announced the smallest number of intended firings in 30 months, a survey by the Chicago- based placement firm Challenger, Gray & Christmas Inc. found. The 68,623 announced job cuts represented a 53.1 percent drop from April's 146,399. |
