U.S. jobless claims rise
Thursday, May 24th 2001, 12:00 am
By: News On 6
WASHINGTON (AP) _ New claims for state unemployment insurance rose sharply last week, fresh evidence the weakening economy is making it harder for workers to hold onto their jobs.
The number of workers filing new claims for jobless benefits jumped 15,000 to a seasonally adjusted 407,000 for the work week ending May 19, the Labor Department reported Thursday. That was the highest level since April 28, when claims shot up to 425,000.
The new increase was bigger than many analysts expected.
The week before, jobless claims rose 4,000 to 392,000, according to revised figures. The government had previously reported that claims had fallen by 8,000 to 380,000. A government analyst attributed the large revision on a computer glitch that affected data sent to federal officials by one state, which the analyst would not identify.
The more stable four-week moving average of claims, which smooths out week-to-week fluctuations, however, slipped to 403,000 last week, the lowest level since April 21.
Seeking to hold off recession, the Federal Reserve has cut interest rates five time this year, totaling 2.5 percentage points. The rate cuts lower borrowing costs and are designed to encourage spending by consumers and investment by businesses, which would stoke economic growth.
The economic slowdown that has gripped the country since the second half of last year has forced companies to cut production and jobs because of slumping demand. Manufacturing has been the hardest hit by the slowdown, while housing and construction have generally held up well.
In April, the nation's unemployment rate jumped to 4.5 percent and businesses cut payrolls for the second straight month. Economists worry that if the unemployment picture continues to worsen consumers _ a main force propping up the economy _ will sharply cut spending and tip the country into recession.
For the work week ending May 12, 20 states and territories reported increases in new jobless claims, while 32 reported decreases. The information is a week behind national figures and is not seasonally adjusted.
The state with the biggest increase was Mississippi, up by 1,280. Officials attributed the rise to layoffs in the apparel, furniture and trade industries. Other states with increases: Ohio, by 1,152; Kentucky, 939; New York, 700; and New Jersey, 633.
The state with the biggest decrease in claims was Michigan, down by 2,437 because of fewer layoffs in the automobile industry. Others with declines: Puerto Rico, 1,588; Texas, 1,291; Hawaii, 894; and Oregon, 875.