Jobless Claims See Surprise Rise; Fluke Cited
{{#rendered}} {{/rendered}}The number of new jobless claims filed last week skyrocketed by 64,000, but the layoffs picture was in part distorted by laid-off workers who were seeking to get their unemployment benefits extended for another 13 weeks.
For the work week ending March 30, new claims for jobless benefits jumped by a seasonally adjusted 64,000 to 460,000, the highest level since the beginning of December, the Labor Department reported Thursday.
Many analysts had expected new claims to fall.
{{#rendered}} {{/rendered}}A government analyst said that a portion — he did not know exactly how much — of the big rise in claims resulted from a federal provision requiring workers whose benefits had run out to file a new claim in order to become eligible for an extension of federal jobless benefits.
Because of this requirement, the weekly claims figures — usually a good proxy for layoffs — could be volatile in the next few weeks.
Congress recently passed legislation signed into law by President Bush that provided a 13-week extension of jobless benefits.
{{#rendered}} {{/rendered}}The more stable four-week moving average of new claims, which smoothes out week-to-week fluctuations, also rose last week to 403,750, the highest level since the middle of January.
The nation's unemployment rate dipped to 5.5 percent in February. But many economists believe the rate will rise to 5.6 percent when the government releases the employment report for March on Friday.
Businesses had slashed thousands of jobs to cope with a recession that began in March 2001. Companies' profits took a real hit during the slump, as did capital investments.
{{#rendered}} {{/rendered}}Economists project companies will be reluctant to quickly hire back laid-off workers until profits recover and business executives are convinced that the economic recovery is here to stay.