Jobless Claims: Highest Level Since '92 June 7, 2001

WASHINGTON (Reuters) via NewsEdge Corporation -

The number of new applications for state jobless benefits rose to its highest level in more than 8-1/2 years last week, the government said on Thursday, in a report showing a job market that continues to soften.

Initial claims for state unemployment insurance benefits rose to 432,000 in the Memorial Day holiday-shortened week ended June 2 from 419,000 in the prior week, the Labor Department said.

Claims have not been at this high a level since the week of Sept. 19, 1992, when they stood at 438,000 as the U.S. economy was struggling to emerge from the 1990-91 recession.

New claims have also held above the key 400,000 mark -- indicating a weakening job market -- for three straight weeks, the longest such stretch since a five-week string that ended in September 1992.

The report heightened concerns on Wall Street that the worst may not yet be over the struggling U.S. economy.

``This is further indication of labor market weakness and that's a big worry now -- that the slowdown in growth is going to inflict such damage to employment incomes that consumer spending will fall,'' said Pierre Ellis, senior economist at Decision Economics Inc. in New York.

Wall Street economists expected a modest dip in new claims to 417,000 from the prior week.

Cindy Ambler, a Labor Department spokeswoman, noted that the seasonal factors used to adjust the report ``had expected a large drop in the holiday-shortened week and did not get it.''

The closely watched four-week moving average, which irons out week-to-week volatility, rose to 413,500 in the June 2 week from 402,500 in the prior week, reaching its highest level since the week of Oct. 3, 1992, when it stood at 417,250.

In a sign the unemployed are remaining on the rolls longer, continued claims -- those who have already collected at least a week of benefits -- rose to 2,993,000 in the week ended May 26 -- the latest week for which figures are available -- from 2,784,000 in the prior week.

The last time continued claims were this high was the week of Nov. 7, 1992, when they reached 3,035,000.

In the week ended May 26, Labor said five states and Puerto Rico had an increase in claims of more than 1,000, led by Wisconsin.

Wisconsin reported 3,352 new applications centered in construction, trade, service and other unspecified manufacturing industries.

In the same week, five states reported a decrease of more than 1,000, led by California with 2,153 fewer claims in the construction and service industries, and agriculture.

http://www.individual.com/story.shtml?story=c0607092.500

-- Martin Thompson (mthom1927@aol.com), June 07, 2001