Jobless Claims Up
Thursday, February 8th 2007, 8:34 am
News On 6
WASHINGTON (AP) _ The number of newly laid off workers filing for unemployment benefits edged up slightly last week but still remained at levels signaling a solid labor market.
The Labor Department reported Thursday that 311,000 newly jobless workers applied for benefits last week, an increase of 3,000 from the previous week.
The advance was in line with expectations as economists continue to believe that the labor market is holding up well. Even in the face of a six-month slowdown last year, layoffs did not increase in most industries although the troubled housing and auto sectors have suffered job losses.
In other economic news, the nation's retailers reported mixed results in January with the redemption of holiday gift cards helping to boost sales even though frigid weather came too late in the month to give a boost to sales of unsold winter clothing.
The winners included Limited Brands Inc. and Wet Seal Inc while the disappointments included Costco Wholesale Corp. and Bebe Stores Inc.
The unemployment rate did creep up in January, rising from 4.5 percent to 4.6 percent. Analysts are forecasting further increases in the months ahead, looking for the jobless rate to hit 4.9 percent by the middle of this year. The 4.6 percent figure is low by historical standards, however.
A small rise in the jobless rate is what the Federal Reserve is expecting as a result of its two-year campaign to raise interest rates enough to slow the economy and reduce inflation. So far, the Fed appears to be achieving its goal of a soft landing in which growth slows enough to dampen inflation but not so much that it risks triggering a recession.
The 311,000 new jobless claims filed last week were the highest volume of applications since 327,000 unemployed workers went to claims office two weeks ago. Claims have been unusually volatile so far this year, in large part because the government has trouble seasonally adjusting the numbers at this time of year.
Two weeks ago, the seasonally adjusted claims number had plunged by 19,000 following a 40,000 surge the previous week.
For the week ending Jan. 27, 31 states and territories reported declines in claims while 22 had an increase.
The largest increase was in California, a rise of 5,514 which was attributed to higher layoffs in the contruction and service industries, followed by Texas, up 3,022, and New Jersey, up 1,451.
The biggest decline in claims occurred in Michigan, a drop of 6,822, followed by Kentucky, a decline of 3,288 which was attributed to fewer layoffs in the auto industry, and Washington state, where claims fell by 2,009.
The individual state numbers are not adjusted for seasonal variations.