Posted on: Friday, October 3, 2003

Claims up for jobless aid

By Jeannine Aversa
Associated Press

WASHINGTON — More people submitted new claims for unemployment insurance last week as laid-off workers who were prevented from filing because of Hurricane Isabel applied for benefits.

For the work week ending Sept. 27, new applications for jobless benefits rose by a seasonally adjusted 13,000 to a two-week high of 399,000, the Labor Department reported yesterday.

New claims hit a high this year of 459,000 in the middle of April. While layoffs have eased somewhat, economists said the current level of claims still points to a sluggish labor market.

"There are indications that the hemorrhaging of jobs is slowing down," said Ken Mayland, president of ClearView Economics. "But the labor market is still in a crawl."

Mayland said he believes economic growth eventually will translate into job creation, but probably not until later this year. "Companies are working existing workers very, very hard," he said, referring to productivity gains that have allowed companies to produce more with fewer employees. "The rubber band has been stretched so far," he said.

Economists believe companies will want to wait until profits grow and they have more confidence in the recovery before they go on a hiring spree.

The unemployment rate, now at 6.1 percent, is expected to nudge up to 6.2 percent for September. The economy also is expected to have lost around 25,000 jobs during that month, which would mark the eighth straight month of job losses.

About half of last week's rise in jobless claims was attributed to people deterred from filing earlier because of disruptions related to the storm, a Labor Department analyst said.

The more stable four-week moving average of claims last week decreased to 403,500. But even with the decline, claims were still above 400,000, a level associated with a weak job market. The four-week moving average has been running above 400,000 for five straight weeks, discouraging economists.

The number of unemployed people collecting jobless benefits for more than a week rose by 62,000, to 3.7 million, for the work week ending Sept. 20, the most recent period for which that information was available. That was the highest level since the end of June.