Unemployment claims surge in latest week
Labor Department says 378,000 filed for unemployment for the first time last week, well above forecasts.
NEW YORK (CNNMoney.com) -- New filings for unemployment claims rose more than expected last week, matching the highest level since 2005, according to a report released Thursday by the Labor Department.
According to the report, 378,000 people filed for unemployment for the first time in the week ended March 15, up 22,000 from a revised 356,000 reported in the previous week.
The 378,000 reading, which is subject to revision, matched the number reported for the week ended Jan. 26. New jobless claims last exceeded that number on Oct. 1, 2005 when they hit 385,000.
A consensus of economists polled by Briefing.com had expected to see initial jobless claims to rise by 4,000 to 360,000.
The level of new jobless claims can be used as a recession indicator. "I think it confirms that we're in a recession, or at least in a period of negative growth," said Ethan Harris, chief U.S. economist for Lehman Brothers.
However, since initial jobless claims tend to bounce around, "I wouldn't take that 22,000 jump literally; I would give it a grain of salt," said Harris.
The sharp jump in new jobless claims could also have an effect on employment numbers for the month. The rise came during the same week that the Labor Department conducts its payroll survey to determine the overall employment rate for March.
While the jobless claims report offers an up-to-the week measure of the labor market, the monthly employment report reveals a broader view of layoffs and hiring, which some economists use to help determine the health of the overall economy.
The Labor Department's monthly employment report for March comes out April 4.
Over the past four weeks, an average of 365,250 people filed for unemployment for the first time per week, up 6,000 from the previous week's revised average of 359,250, and higher than the 324,000 average reported during the same period last year.
Continuing claims for those already receiving benefits rose to 2.87 million in the week ended March 8, the most recent week available, from a revised 2.83 million reported for the prior week. It's the highest level for continuing claims since August 2004, when Hurricane Charley struck Florida, according to Labor Department data.
Even though continuing unemployment claims continue to accumulate, economist Robert Brusca of FAO Economics, was a little more optimistic than Harris.
"So far the weight of evidence isn't on recession, but we're probably headed for recession," he said.
Over the four weeks ended March 8, continuing jobless claims reached 2.83 million on average per week, up from the prior week's revised average of 2.81 million, and well above the 2.56 million average reported for the same period last year.
California saw the biggest increase in first-time claims in the week ended March 8, up more than 3,000, while claims in Wisconsin, Indiana and Michigan all rose by more than 2,000. New York saw the biggest drop in claims, with more than 13,000, but that was after a similar gain in the previous week.