Jobless claims go down
Benefit filings dipped by 22,000 last week from the week before - but not enough to fuel optimism.
WASHINGTON - The number of newly laid off workers filing applications for unemployment benefits dropped last week, but not enough to indicate that strains on the labor market are easing.
The Labor Department reported yesterday that 356,000 claims for jobless benefits were filed last week, a decline of 22,000 from the previous week. The decline erased only a part of the huge jump of 72,000 claims in the previous week.
The four-week average for jobless claims rose to 335,000, which was the highest level in a month.
A severe slowdown in economic growth that has raised concerns about a possible recession has begun to affect the labor market. The government reported last week that the economy shed 17,000 jobs in January, the first monthly job loss in more than four years.
Analysts said the performance of claims in the last two weeks showed that a surprising decline from mid-December to mid-January was a statistical fluke caused by difficulty in adjusting the numbers around holidays and the start of the year. They predicted further increases in jobless claims in coming weeks as more companies are forced to lay off employees.
"In this environment, simply cutting back on hiring will not be enough for companies to maintain earnings as demand slows. Jobs will have to be cut, too," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Many economists said they believed that the current quarter would be the maximum danger point for the economy to slip into a recession, which would be the first downturn since 2001.
For the week ended Jan. 26, 43 states and territories reported a decrease in claims while nine reported increases.
The biggest drop was in Michigan, a fall of 7,546 that was attributed to fewer layoffs in all industries. The biggest increase for the week of Jan. 26 was in Wisconsin, a jump of 2,335 claims applications, a jump that was blamed on greater layoffs in construction, trade, transportation, warehousing and manufacturing industries.