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U.S. Initial Jobless Claims Rose by 12,000 to 430,000 Last Week
By Siobhan Hughes
Washington, March 6 (Bloomberg) -- The number of U.S. workers filing new claims for state unemployment benefits last week rose to the highest this year as snow storms hit the Northeast and companies fired more workers.
States received 430,000 applications for jobless aid in the week ended Saturday, the Labor Department said. That followed 418,000 the prior week. The less volatile four-week moving average of claims rose to 408,750, the highest since the final week of December.
The longer queues of jettisoned workers add to evidence that the economy stumbled in February as the U.S. moved closer to war with Iraq. Manufacturing and services grew more slowly, consumer confidence sank to a nine-year low and auto sales matched the lowest pace in more than four years. The winter weather forced some companies including builders to idle workers.
``We're starting to see the extra damping pressure from Iraq really show up in the statistics,'' said Ethan Harris, chief U.S. economist at Lehman Brothers Inc. in New York, before the report. ``If you look at the most recent data, you can see a further worsening.''
Jobs are essential for a recovery because consumer spending accounts for two-thirds of the U.S. economy. The February unemployment rate probably rose to 5.8 percent from 5.7 percent in tomorrow's report, based on the median estimate in a Bloomberg News poll of 63 economists. Harris said he expects the report to show a loss of jobs, compared with the median forecast of a 10,000- worker increase.
For today's report, economists had forecast that jobless claims would fall to 404,000 from an originally reported 417,000, based on the median of 36 forecasts. Some economists view claims above 400,000 as a sign of a weakening job market. The past three weeks were the longest stretch for weekly claims to exceed that figure since August and September.
Weather Effect
The rise in claims last week reflected ``industries that are sensitive to the weather,'' said Tom Stengle, a spokesman for the Labor Department. He said the increase was concentrated in the mid- Atlantic states, where snow storms closed stores, government offices and public transportation.
Claims have averaged 397,000 so far this year, compared with 405,000 last year.
The number of workers continuing to receive jobless benefits increased by 180,000 to 3.516 million in the week that ended Feb. 22, the highest since the week ended Nov. 16.
Many Americans have sensed a renewed weakness in the job market. The share of consumers who consider jobs hard to get rose to 30.1 percent in February, the Conference Board's latest consumer confidence index showed. That was the highest since May 1994 and more than reversed an improvement in January.
More Job Cuts
TXU Corp., the largest Texas power generator, said yesterday it would cut an undisclosed number of jobs, including 30 percent of executive positions, to help reduce costs. Toys ``R'' Us Inc., the No. 2 U.S. toy retailer, said that it planned to eliminate about 200 more jobs after holiday sales sluggish.
The job cuts follow other signs of weakness in the U.S. economy in February. Manufacturing and services slowed, and the Conference Board's consumer confidence index dropped to 64, the lowest since October 1993. Automobile sales dropped to a 15.4- million annual rate, matching an October pace that was the slowest since August 1998.
The insured unemployment rate, which tends to track the U.S. jobless rate, increased to 2.8 percent in the week that ended Feb. 22 from 2.6 percent the prior week.
The Labor Department also said that 14 states and territories reported an increase in new claims during the week that ended Feb. 22, while 39 states and territories reported a decrease.
