New jobless claims fall for fourth week in a row, suggesting worst of terror attack layoffs may be over
Wednesday, November 21st 2001, 12:00 am
By: News On 6
WASHINGTON (AP) _ New claims for state unemployment benefits fell for the fourth straight week, suggesting that the surge of layoffs seen after the terror attacks may be easing.
The Labor Department reported Wednesday that for the work week ending Nov. 17, new jobless claims dipped by a seasonally adjusted 15,000 to 427,000. That followed a drop of 10,000, an even bigger decline than the government previously estimated, according to revised figures.
Even with the decline, the level of jobless claims remained high enough to suggest that the labor market continues to be weak.
A four-week moving average of the number of laid off workers continuing to collect unemployment benefits rose to 3.73 million for the work week ending Nov. 10, indicating that jobless workers are having a difficult time finding employment. The moving average, which smoothes out weekly fluctuations, was the highest since May 7, 1983.
To cope with the sour economy and fallout from the terror attacks, companies have cut production, trimmed hours and let workers go.
The nation's unemployment rate soared from 4.9 percent in September to 5.4 percent in October and companies eliminated 415,000 jobs, the biggest one-month drop in 21 years. Economists predict the jobless rate will climb in the months ahead as companies continue to be reluctant to hire new workers.
The drop in new claims last week put them at the lowest level since the week ending Sept. 15. That earlier report, however, did not capture layoffs resulting from the terror attacks because most affected workers were not able to file applications for jobless benefits that week. In the two weeks following that report, jobless claims soared.
Some economists believe the unemployment rate will top out at around 6.3 percent in the first quarter of 2002.
The more stable four-week moving average of new claims, which smoothes out week-to-week fluctuations, declined last week to 454,250, the lowest level since Sept. 22.
Fallout from the more-than-yearlong economic slump, along with the terror attacks, caused the economy to contract at a rate of 0.4 percent in the July-September quarter. Many economists are predicting a bigger drop in the current quarter. That would meet one common definition of a recession: two consecutive quarters of declining economic output.
In an effort to prevent the economy from sinking deeper into recession, the Federal Reserve has cut interest rates three times since Sept. 11, and 10 times this year.
Economists and the Bush administration are counting on the Fed's aggressive easing, President Bush's tax relief enacted earlier this year and new tax cuts and increased government spending being contemplated by Congress to lead to a recovery in 2002.