New jobless claims up sharply last week
Thursday, May 3rd 2001, 12:00 am
By: News On 6
WASHINGTON (AP) _ The number of Americans filing new claims for state unemployment insurance rose sharply last week to a five-year high. The report offered fresh evidence that employers' demand for workers has waned as the economy slowed.
The Labor Department reported Thursday that jobless claims went up by a bigger-than-expected 9,000 to a seasonally adjusted 421,000 for the workweek ending April 28. Many economists were expecting claims to fall.
The increase kept claims at their highest level since March 23, 1996, when they stood at 428,000. Claims hit a five-year high two weeks ago when they rose to 412,000, according to revised figures, a bigger increase than the government previously thought.
On Wall Street, the jobless-claims report added to investors' anxiety about the struggling economy. The Dow Jones industrial average lost 152 points and the Nasdaq was down 48 in the first hour of trading.
Seeking to stave off recession, the Federal Reserve has slashed interest rates four times this year, totaling 2 percentage points. Many economists expect another rate reduction when policy-makers meet next on May 15.
In the first three months of this year, the economy grew at an annual rate of 2 percent, twice as fast as many economists predicted and double the 1 percent rate posted in the fourth quarter.
On Friday, the government will report on the nation's employment situation and many analysts expect the unemployment rate, now at 4.3 percent, ticked up to 4.4 percent in April. Demand for labor has eased as the economy has slowed. Economists foresee the unemployment rate rising to possibly 4.7 percent by August.
Economists also project that total payrolls grew by about 80,000 in April, an improvement from the huge job cuts seen in March when payrolls fell by 86,000.
Thursday's report also showed that the more stable four-week moving average of new jobless-benefit claims, which smoothes out week-to-week fluctuations, also rose sharply to 404,500 last week. The increase kept the moving average of claims at the highest level since Oct. 10, 1992, when claims were 406,750. The moving average hit a nearly nine-year high two weeks ago.
For the workweek ending April 21, 27 states and territories reported increases in claims, while 25 reported decreases. The state data lag a week behind the national figures and are not adjusted.
New York had the biggest increase, 10,748. Officials attributed the rise to layoffs at schools during spring break. Other states with increases were: North Carolina, up 5,542; Massachusetts, up 5,214; and South Carolina, up 4,135.