Jobless claims fall by largest amount in 6 months
Thursday, December 7th 2006, 8:29 am
By: News On 6
WASHINGTON (AP) _ The number of newly laid off workers filing claims for unemployment benefits dropped last week by the largest amount in six months, relieving worries about a big jump in claims in the previous week.
The total number of claims filed last week fell to 324,000, a decline of 34,000 from the previous week, the Labor Department reported Thursday. That represented the biggest one-week drop since the first week in June.
The decrease was in line with expectations of economists, who believed that an unexpectedly large jump of 35,000 claims the previous week was an aberration.
The four-week moving average for jobless claims edged up slightly to 328,750, the highest level since May, while the number of Americans receiving claims rose to 2.52 million, the highest level since January.
Even with those increases, analysts said the labor market appears to be withstanding this year's economic slowdown, which has been brought on big a big drop in the once-booming housing market and weakness in other areas such as auto sales.
The Federal Reserve engineered the current slowdown with a two-year campaign to raise interest rates in an effort to achieve a soft landing in which economic growth slowed enough to keep inflation in check but not enough to trigger a full-blown recession.
While the Fed appears close to achieving this goal, some economists worry that a bigger-than-expected drop in housing activity could trigger a more severe slowdown, especially if job layoffs intensify in such areas as construction.
So far, businesses have trimmed their plans to hire new workers but have resisted pressures to lay off existing workers. Economists believe that Friday's report on employment in November will show a moderate gain of 105,000 workers, slightly better than the 92,000 jobs added in October.
Analysts believe that the unemployment rate, which fell to a five-year low of 4.4 percent in October, will edge up slightly to 4.5 percent in November.
For the week ending Nov. 25, claims had risen by 35,000 to 358,000. Economists attributed the big swings in the two weeks to trouble seasonally adjusting the figures for weeks that include a holiday such as Thanksgiving, when state claims offices are open one less day.
In the week ending Nov. 25, Wisconsin had the biggest increase in claims, a jump of 10,655, which was blamed on higher layoffs in construction and various other industries. Other big increases in claims were in Texas, up 4,855, and Indiana, which had an increase of 1,842.
The state with the biggest drop in claims for the week of Nov. 25 was California, down by 10,870, a drop that was attributed in part to claims offices being open one less day. Other big decreases in claims occurred in Illinois, down 5,597 and Florida, down 4,704.
The state data on claims lags one week behind the national figures.