U.S. Initial Jobless Claims Rose Last Week to 372,000 in Signal Labor Market Weakening

[marmar]

from Bloomberg:



U.S. Initial Jobless Claims Rose Last Week to 372,000 (Update1)

By Courtney Schlisserman

May 29 (Bloomberg) -- The number of Americans filing first- time claims for unemployment benefits increased last week, a sign the labor market is deteriorating as the economy slows.

Initial jobless claims rose 4,000 to 372,000 in the week ended May 24, from a revised 368,000 the prior week, the Labor Department said today in Washington. The total number of people collecting benefits swelled to 3.104 million in the week ended May 17, the highest level since February 2004.

U.S. companies are responding to the current economic downturn by reining in hiring rather than making workforce cuts as steep as they have in past recessions. In the 2001 recession, initial claims averaged 415,600 a week.

``The labor market has loosened, but on an historic basis it's still relatively tight,'' said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado. ``Essentially the projections of weakness people have may have overdone the path we're going to see in 2008.''

A separate government report showed the U.S. economy grew more than previously estimated in the first quarter as the trade deficit shrank to a five-year low. The 0.9 percent gain in gross domestic product from January through March compares with the government's advance estimate of 0.6 percent issued in April, according to revised figures from the Commerce Department today in Washington.

Treasury Yields

Treasuries, which had dropped earlier in the day, pared their losses. Ten-year notes yielded 4.03 percent at 8:42 a.m. in New York, from 4 percent late yesterday.

Economists had forecast claims would rise to 370,000, from a previously reported 365,000 a week earlier, according to the median of 38 projections in a Bloomberg News survey. Estimates ranged from 355,000 to 380,000.

The four-week moving average of initial claims, a less volatile measure, fell to 370,500 from 373,000.

The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, held at 2.3 percent. Twenty-eight states and territories reported an increase in new claims, while 25 had a decrease. These data are reported with a one-week lag.

May Jobs Report

Weekly claims have averaged 358,150 so far this year, compared with an average of 321,000 in 2007, when the economy generated an average of 91,000 new jobs a month.

The figures for continuing claims coincide with the week that the government surveys employers for the monthly payrolls report. The Labor Department is scheduled to release the report for May on June 6. The U.S. has lost jobs every month this year so far, including a 20,000 drop in April. ....(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601068&sid=aOMLzLfvLQZ8&refer=home

[Captain Angry]

1. At some point, the jobless claims will hit zero.

Because you can only claim unemployment if you've been laid off.

At some point, the layoffs will combine with no hiring to = no unemployment since nobody will be filling out the paperwork as newly unemployed.

How's that for a measure of labor market strength?