Thursday June 18, 02:48 PM
US initial jobless claims rise
By P. Parameswaran
WASHINGTON (AFP) - New claims for US unemployment benefits rose last week after four weeks of declines, the Labor Department said Thursday in a sign of lingering job market weakness in a recession-bound economy.
Initial claims for unemployment insurance benefits rose to a seasonally adjusted 608,000 in the week ended June 13 from an upwardly revised 605,000 claims in the prior week, the department said.
Most analysts had expected new claims of 604,000, down from peak levels in March which they hit 674,000.
The four-week moving average continued to drop, falling to 615,750.
But data that surprised analysts was the continuing claims for unemployment for persons seeking to extend benefits.
They decreased by 148,000 to 6.687 million for the week ending June 6 from the previous week's revised level of 6.835 million, which was the the highest level since tracking of the data began in 1967.
This suggests some of the unemployed are finding jobs again, analysts said.
"This week's claims data provided among the clearest signals yet that labor market contraction is easing," said Andrew Gledhill, an economist at Moody's Economy.com.
The drop in continuing claims for the first time in five months is "a positive sign that the recently slower pace of layoffs -- albeit still elevated -- is starting to have some impact," he said.
The positive outlook was also reflected in a drop in the insured unemployment rate to 5.0 percent, which has not dropped since last August. The prior week's rate was 5.1 percent.
While the number of continuing claims still remain at a disconcertingly high level, "it qualifies as relatively good news today since it marks the first decline in continuing claims since the week of January 3," said Briefing.com's Patrick O'Hare.
The latest department monthly labor report for May, seen as one of the best indicators of economic momentum, offered conflicting signals about a weak labor market, but suggested that the pace of massive job cuts appeared to be easing.
Some 345,000 nonfarm jobs were shed in May -- much lower than the 520,000 expected and about half the monthly decline of the past six months.
But the unemployment rate, based on a separate survey of households, rose sharply from 8.9 percent to a worse-than-expected 9.4 percent, the highest level since August 1983.
President Barack Obama said Tuesday that unemployment was expected to hit 10 percent this year following the recession that began in December 2007.
But he said the pace of job loss had slowed and thought the economy was going to turn around from contractions of 6.1 percent in the last quarter of 2008 amd 5.7 percent in the first quarter of 2009.
"But as you know, jobs are a lagging indicator. And we've got to produce 150,000 jobs every month just to keep pace, just to flatten this out," he said.
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