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New unemployment claims jump by 20,000
Thursday, October 28, 2004 1:25 PM PDT
WASHINGTON (AP) - The number of Americans filing new claims for unemployment benefits rose last week by 20,000, the largest jump in a month, the Labor Department reported today.
The bigger-than-expected increase pushed total new claims to 350,000 last week and provided fresh evidence that the labor market is still under pressure even though the economic recovery is about to celebrate its third anniversary.
The increase of 20,000 was sharply higher than the 6,000 gain that many private economists had been expecting and was the biggest one-week rise since a jump of 21,000 claims in the week of Sept. 25.
The four-week moving average for claims, which is intended to smooth out some of the volatility from the week-to-week changes, fell slightly to 343,250 last week, down from 348,750 the previous week. It was the lowest level for the four-week moving average since mid-September.
Labor Department analysts said the increase in the number of new claims is still being inflated by hurricane-related lay offs in Florida although this impact has been declining in recent weeks. Claims have been unusually volatile during this period. Claims had fallen by 25,000 in the week ending Oct. 16.
The health of the economy has been a major debating point in the presidential campaign with President Bush contending that his tax cuts have helped the economy to recover from the 2001 recession while challenger Sen. John Kerry contends that the tax cuts went overwhelmingly to the wealthy and did little to spur economic growth.
While Bush has pointed to job growth over the past 13 months, Kerry counters that it has not been enough to make up for all of the jobs lost since the beginning of the recession. There are 821,000 fewer people on payrolls than when Bush took office in January 2001.
After a spurt of hiring in the spring, job growth weakened in the summer as the economy moved through what Federal Reserve Chairman Alan Greenspan has termed a "soft patch" caused by the sharp spike in energy prices this year.
For September, the unemployment rate held steady at 5.4 percent, but businesses added just 98,000 new jobs, far below what analysts had been expecting.
Economic growth slowed to an annual rate of 3.3 percent in the April-June quarter after suring at an annual rate of 4.5 percent in the first three months of the year.
Many analysts believe Federal Reserve policy-makers, when they next meet on Nov. 10, will decide to nudge interest rates up by another quarter-point in an effort to make sure that a rebounding economy does not trigger unwanted inflationary pressures.
The report today on jobless claims showed that the number of people continuing to collect unemployment benefits rose by 38,000 to 2.82 million for the week ending Oct. 16, the most recent period for which information is available. |