ICS Magazine

Jobless Claims Climb in Latest Week

June 24, 2004
WASHINGTON (Reuters) - The number of Americans seeking jobless benefits rose more than expected last week, as those unable to file during the June 11 funeral for President Ronald Reagan lodged delayed applications, the government said on Thursday.

First-time claims for state unemployment insurance rose 13,000 to 349,000 in the week ended June 19 from 336,000 the prior week, the Labor Department said. Wall Street economists had forecast a smaller climb to 340,000 new claims.

A Labor Department spokesman attributed a portion of the rise to the filing of applications delayed by the closure of government offices for a national day of mourning for Reagan the week before.

The U.S. labor market has been improving in recent months, at last showing the effects of a pick-up in the overall economy. However, jobless claims have been volatile.

Treasury bonds rallied on the claims data and on an unexpected drop in durable goods orders in a separate government report -- soft numbers that should ease fears of aggressive rate rises from the Federal Reserve.

The four-week moving average, considered by many economists to be a more accurate barometer of labor trends because it irons out the weekly fluctuations, edged up slightly to 344,250 from 343,250 the prior week. That was well below the 421,500 registered in the same period a year ago, the department said.

The ranks of unemployed workers drawing benefits for more than a week swelled by 75,000 to 2.97 million in the week ended June 12, the latest week for which data are available. That too was well below 3.66 million in the same period a year ago.

"Jobless claims increased, but not dramatically," said Patrick Fearon, economist for A.G. Edwards and Sons in St. Louis, Missouri. "They still suggest that the labor market is stronger than it was half a year ago or a year ago."

This improvement has been underpinned by a broad economic rebound that lifted retail sales in May and sparked a recovery in the battered manufacturing sector.

The Fed's policy-setting Federal Open Market Committee meets next Tuesday and Wednesday and is widely expected to push rates up by a quarter percentage point to keep inflation in check as the economy rebounds.

In May, the government reported 248,000 new jobs were created. In the three months from March through May, 947,000 jobs were added to payrolls -- the strongest three-month jobs performance in four years.

The latest comprehensive snapshot of the job market comes with the July 2 release of the June employment report, which is expected to show a rise to 255,000 in payroll jobs from last month's 248,000.

The unemployment rate is expected to remain unchanged at 5.6 percent.