NEW YORK (CNN/Money) - New jobless claims in the United States surged last week, the government said Thursday, staying well above a reading that points to a weak labor market in a moribund economy.
The Labor Department said the number of Americans filing new claims for unemployment benefits rose to 445,000 in the week ended March 29 from a revised 407,000 the prior week. Economists, on average, expected 410,000 new claims, according to a Reuters poll.
Last week's number of jobless claims was the highest since 452,000 on April 13, 2002. Any number above 400,000 indicates labor market weakness, and claims have been above that level for seven straight weeks.
The news came a day before the Labor Department was scheduled to report on the unemployment rate and payrolls picture for March. According to a Reuters poll, economists, on average, think unemployment rose to 5.9 percent from 5.8 percent in February and that employers cut 29,000 jobs from payrolls, compared with 308,000 in February.
"The trend in claims has risen this year, in tandem with the clear drop in business confidence in the period before the war with Iraq," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. "If claims are sustained at this level they will signal an acceleration in the rate of net job losses recorded in the payroll numbers."
U.S. stock market futures had little reaction to the report, trading higher and pointing to a positive opening on Wall Street. Treasury bond prices fell.
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Private non-farm payrolls are 2.5 million jobs lower than they were in March 2001, when economists at the National Bureau of Economic Research say a recession began. After a brief recovery in mid-2002, the labor market has worsened in recent months.
Most of the trouble, many economists believe, has been concern about the economic impact of the United States going to war with Iraq. According to this view, businesses will make long-term spending and hiring plans once the war is over.
Other economists, however, worry that businesses will not start hiring again until they see demand pick up significantly. Since there's little pent-up demand on the part of consumers, whose spending makes up more than two-thirds of the economy, it seems possible that the full economic recovery could take longer than most economists think.
In any event, most economists expect it will be months before the labor market begins growing significantly.
In the Labor Department's report Thursday, the four-week moving average of weekly jobless claims, which irons out the ups and downs of the volatile weekly data, rose to 426,250 from a revised 423,750 the prior week.
Continued claims, the number of people out of work for a week or more, rose to 3.61 million in the week ended March 22, the latest data available, from a revised 3.5 million the prior week.
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