‘Surprise’ rise in new US jobless claims

“Unexpectedly!”

There is no recovery.

(Financial Times) — The number of US workers making first-time claims for jobless benefits unexpectedly rose last week, as the government worked through a pre-holiday backlog of filings.

Initial jobless claims climbed by 36,000 to 482,000, labour department figures showed on Thursday. That disappointed analysts, who were expecting claims to shrink, and was the third consecutive monthly rise.

The less volatile four-week average of new claims was also up, rising by 7,000 to 448,250 and breaking a 19-week stretch of declines.

Economists keep a close watch on jobless claims and have been hoping they would fall closer to the 400,000 level, which is needed for the economy to create jobs.

The total number of people in the US claiming unemployment benefits declined. The decline of 18,000 to 4.6m was largely because of benefits expiring.

The labour department blamed the increase on a crush of filings during the holiday season and said that it did not “reflect economic reasons”.

Joshua Shapiro, chief US economist at MFR, argued that although the administrative backlog may be to blame, the healthy declines in claims from December were likely over-stated.

The continued pressure on the labour market comes as the Obama administration is under renewed pressure to create jobs now that its signature healthcare initiative appears to be in limbo.

Last week California, Texas, Florida and Pennsylvania recorded the biggest jumps in jobless claims. The construction, manufacturing, construction and trade services sectors weathered the heaviest losses.

“We continue to believe that we are close to the point where the economy will begin creating a modest amount of jobs, although these claims data do not clinch the case that we will see an increase in jobs in January,” noted John Ryding and Conrad DeQuadros, economists at RDQ Economics.

By Alan Rappeport in New York
Published: January 21 2010 14:25 | Last updated: January 21 2010 14:25

Source: The Financial Times

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