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Posted on 10/02/2003 5:34:23 AM PDT by Brian S
U.S. Initial Jobless Claims Rose by 13,000 to 399,000 Last Week Oct. 2 (Bloomberg) -- The number of Americans filing initial applications for unemployment benefits rose last week, the government reported, a sign that economic growth has yet to boost demand for workers.
First-time claims during the week that ended Saturday totaled 399,000, an increase of 13,000 from a revised 386,000 a week earlier, the Labor Department said in Washington. The department said about half of the rise came from workers who had been unable to submit claims during Hurricane Isabel.
Companies trying to hold down costs have been reluctant to add to payrolls, instead using gains in efficiency to meet demand while the expansion gains momentum. The economy may have grown in the July-September quarter at the fastest pace since the first three months of 2002, according to a Bloomberg survey.
``The overall message we're getting is that the labor market is still struggling,'' said Doug Porter, a Toronto-based senior economist at BMO Nesbitt Burns Inc., the investment bank, before the report. ``The figures are consistent with no improvement in the trend.''
The number of people continuing to collect state unemployment insurance rose by 62,000 to 3.67 million in the week that ended Sept. 20. The level was the highest since June 28 for continuing claims, which are reported with a one-week lag to initial claims.
The insured unemployment rate, which tends to move with the monthly jobless rate, stayed at 2.9 percent in the week before last. During that week, 10 states and territories reported an increase in new claims, and 43 reported a decrease. The decline included a total reduction of almost 10,000 for North Carolina and Virginia, where Isabel had struck.
Higher Than Forecast
Economists estimated that claims would rise to 395,000 from the initially reported 381,000 the week before, based on the median of 37 forecasts in a Bloomberg News survey.
The four-week moving average of initial claims, a less volatile measure than the weekly number, fell to 403,500 from 408,500.
Tomorrow, the Labor Department is expected to report that the unemployment rate increased in September to 6.2 percent from 6.1 percent, based on the median of 64 forecasts in a Bloomberg News survey. The rate has exceeded 6 percent since May. Payrolls are likely to have fallen for the eighth month in a row.
Productivity expanded during April-June at more than triple the pace of the first quarter, government figures show. The economy may have expanded at a 4.5 percent annual rate in the third quarter, the most since the early last year, based on the median of forecasts in a Bloomberg News survey.
Impact on Spending
For the expansion to be sustained, companies will need to start adding workers, economists said. Otherwise, consumer spending will retreat when the extra cash from recent tax cuts and mortgage refinancing dwindles.
``If we don't see an end to job losses by the end of this year, then everyone will be marking down their growth forecasts for next year.'' Mark Zandi, chief economist at Economy.com, an economic forecasting and consulting firm in West Chester, Pennsylvania, before the report.
A ``notable'' risk to the outlook for improvement is ``that household spending could lose its forward momentum, particularly if there is no job growth,'' said Michael Moskow, president of the Federal Reserve Bank of Chicago, in a letter published yesterday in the bank's ``Executive Update.''
Ford Motor Co., the world's second-biggest automaker by sales, said yesterday it will cut as many as 3,050 jobs in North America by the end of the year, part of an effort by the Dearborn, Michigan, company to reduce global personnel costs 10 percent.
Safeco Corp., a Seattle-based home and car insurer, said it plans to sell its life insurance and asset-management unit and shed 500 jobs.
Yesterday, the New York-based Conference Board's said its consumer confidence index fell in September to the lowest level since the U.S. went to war against Iraq six months ago, as more people voiced concern over jobs.
Some economists expect companies to start hiring before year- end.
``As the economy continues to pick up speed, firms should begin to increase their hiring,'' Moskow said.
Growth is forecast at a 3.8 percent annual rate in both the first and second quarters of next year.
Last Updated: October 2, 2003 08:30 EDT
``As the economy continues to pick up speed, firms should begin to increase their hiring,'' Moskow said.
We're all doomed.
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Overall, we are doing better, but until hiring picks up the economy will be vulnerable, and so will Bush.
That reminds me of my 5 year old..."are we there yet? are we there yet? are we there yet?"
And I think of the doom and gloomers as a bunch of people who think that worrying constantly somehow makes them seem more "concerned" or "in touch". Pure silliness, but it's exactly what Dan Rather and CNN count on.
They're not? I think they're about as great as any people in the history of the world have ever had it.
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