Jobless Claims Hit Highest Level In 2 Months

Thursday, April 12th 2007, 7:56 am
By: News On 6

WASHINGTON (AP) _ The number of Americans filing new claims for unemployment benefits rose last week to the highest level in two months.

The Labor Department reported Thursday that applications for jobless benefits totaled 342,000 last week, up 19,000 from the previous week.

The increase, which followed a rise of 13,000 the previous week, was much larger than had been expected and pushed total claims to the highest level since the week of Feb. 10.

In a second report, the price of imported goods rose by 1.7 percent in March, the biggest jump in 10 months. The Labor Department said the spike in import prices was driven by a 9 percent rise in the cost of imported petroleum, the largest increase in this category in 11 months. The price of non-petroleum imports rose a more modest 0.3 percent.

Import prices, which are closely monitored by the Federal Reserve for indications of rising inflation pressures, had posted a tiny 0.1 percent rise in February and had actually fallen by 1.1 percent in January.

Part of the increase in jobless claims last week was attributed to trouble in seasonally adjusting the data around the Easter holidays, which don't fall on the same week each year.

Even with two weeks of increases in jobless claims, economists believe the labor market remains fundamentally sound. The government reported last week that the unemployment rate dropped to 4.4 percent in March, matching a five-year low, as employers boosted hiring by 180,000 workers, the biggest gain in payroll jobs in three months.

The hiring spurt was seen as evidence that the troubles in housing, including weakness in subprime mortgage lending, were not spreading to the rest of the economy.

The Federal Reserve, which next meets May 9, is expected to keep interest rates unchanged. Wall Street fell on Wednesday following release of the minutes of the March 20-21 meeting that showed the central bank remained firmly focused on fighting inflation. That dashed hopes that the Fed might soon cut interest rates because of the yearlong stretch of a weak economic growth.

The four-week average for jobless claims edged up to 323,250 last week, the highest level in three weeks.

For the week ending March 31, when seasonally adjusted claims had risen by 13,000, a total of 21 states and territories reported increases in claims, compared with 32 reporting decreases. Unlike the national data, the state figures are not adjusted for seasonal variations.

The states with the largest increases were Oregon, with a rise of 1,780, and Missouri, which had an increase of 1,676.

The states with the biggest drop in claims were Michigan, where claims fell by 1,681, an improvement attributed to fewer layoffs in the auto industry, and New York, which had a drop of 1,491 claims, attributed to fewer layoffs in services and manufacturing.