Jobless Claims Increase

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The Wall Street Journal
By:  Jeffrey Sparshott and Eric Morath
February 21, 2013

WASHINGTON--The number of U.S. workers filing new applications for unemployment benefits jumped last week, a reminder of the labor market's slow recovery.

Initial jobless claims, a measure of layoffs, increased by 20,000 to a seasonally adjusted 362,000 in the week ended Feb. 16, the Labor Department said Thursday.

Economists surveyed by Dow Jones Newswires expected 350,000 new applications for jobless benefits. Claims for the prior week were revised up to 342,000 from an initial estimate of 341,000.

The four-week moving average of claims, which smooths out week-to-week volatility, climbed by 8,000 to 360,750.

A Labor Department analyst said figures from four states, including California, were at least partially estimated. Estimates sometimes lead to sizable revisions.

The number of new claims has fallen in two of the past three weeks, and the longer-term trend suggests steady job growth. Hiring typically picks up when layoffs decline.

But progress has been slow. Employers added 157,000 jobs in January, while the unemployment rate moved up one-tenth of a percentage point to 7.9%.

The Federal Reserve, which wants to hold interest rates near zero until unemployment falls to 6.5%, expects the rate to decline only gradually.

In minutes from the central bank's January meeting, released Wednesday, officials said "the recovery in the labor market was far from complete."

Thursday's claims report showed the number of continuing unemployment-benefit claims--those drawn by workers for more than a week--increased by 11,000 to 3,148,000 in the week ended Feb. 9. Continuing claims are reported with a one-week lag.

The number of workers requesting unemployment insurance was equivalent to 2.4% of employed workers paying into the system in the week ended Feb. 9, unchanged from the prior week.

Separately, U.S. consumer prices remained flat in January, with the slowly growing economy putting little pressure on inflation.

The seasonally adjusted index of consumer prices held steady for the second straight month in January, the Labor Department said. Falling energy prices offset higher costs for shelter, clothes and medical services.

The so-called core prices, which don't take into account the volatile food and energy sectors, increased 0.3%.

Economists surveyed by Dow Jones Newswires forecast a 0.1% overall gain and a 0.2% advance for core prices.

The energy index fell for the third straight month in January as gasoline prices declined 3.0% on a seasonally adjusted basis. When removing those adjustments, pump prices rose 0.3%.

Food prices were unchanged as rising fruit and vegetable prices were balanced out by falling beverage costs.

However, other prices were on the rise. Shelter costs, which account for nearly a third of the overall index, increased 0.2%. Electricity rates rose 1.1%, and apparel prices advanced 0.8%

Still, overall flat prices provide some relief to consumers, many of whom saw smaller paychecks last month. A temporary cut to Social Security withholdings expired in January, pushing payroll taxes back to 6.2% from 4.2%.

Year over year, consumer prices were up 1.6% and core prices rose 1.9%. Both levels are below the Fed's 2.0% target for annual inflation.

A separate Labor report Thursday showed Americans' real average weekly earnings increased 0.1% because inflation-adjusted hourly pay increased slightly amid flat prices. The average workweek was unchanged. Since reaching a recent low in October 2012, real average weekly earnings are up 1.3%.

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This page contains a single entry by CFED published on February 21, 2013 4:46 PM.

Fed Meeting Shows Dissent on Measures to Lift Job Growth was the previous entry in this blog.

Higher Minimum Wage Is Imperfect Idea Whose Time Has Come is the next entry in this blog.

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