Author Topic: Jobless Claims Jump to Highest Level Since 2005  (Read 1592 times)

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Offline Wretched Excess

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Jobless Claims Jump to Highest Level Since 2005
« on: April 03, 2008, 02:56:35 PM »
Jobless Claims Jump to Highest Level Since 2005
The number of U.S. workers applying for unemployment benefits soared by 38,000 last week, posting the highest reading since September 2005 and reinforcing fears that the U.S. economy has stalled, government data on Thursday showed.

Meanwhile, a separate report showed the US service sector, which makes up 80 percent of U.S. economic activity, contracted less than expected in March, but overall activity for the month still shrank.

A Labor Department official said there were no special factors to explain the increase in initial claims to 407,000 in the week ended March 29, but he said seasonal adjustments to the data owing to the early timing of the Easter public holiday this year may have influenced the reading.

"Part of what is going on is seasonal adjustments and part of it is higher claims," said the Labor official.

U.S. government Treasury notes extended gains on the news, with investors betting this will encourage the U.S. Federal Reserve to cut interest rates further, while the dollar edged back from earlier highs and stock futures dropped.

"The trend is for rising unemployment. There's no doubt about it," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. "I've been bearish for a long time and I don't think we have found a bottom."

Economists polled by Reuters had expected initial jobless claims to increase to 370,000 in the week ending March 29, compared with 369,000 the prior week, initially estimated at 366,000 claims.

The four-week moving average of new claims, a more reliable guide to underlying labor market trends because it smooths out weekly data swings, also increased sharply. It rose to 374,500, which was the highest reading since October 2005.

Analysts fear a housing slump and credit crunch may have tipped the U.S. economy into recession and are scrutinizing the labor market for evidence of slackening jobs that could chill consumer spending.

In further evidence of soft labor conditions. The number of workers remaining on jobless benefits climbed 97,000 to 2.94 million in the week ending March 22, the most recent week these figures were available. This compared with forecasts for 2.87 million so-called continued claims.

It was the highest reading for continued claims since July 2004.


why am I so sure that this will top all of the evening news broadcasts?