graphic
News > Economy
Jobless claims still rising
May 3, 2001: 9:37 a.m. ET

Weekly claims pass forecasts; 4-week average highest since '92
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - The number of new jobless claims in the United States rose last week to its highest level in more than five years, the government reported Thursday, a sign that the labor market continues to weaken.

The U.S. Labor Department said new claims for state unemployment benefits rose by 9,000 to 421,000 in the week ended April 28 from a revised 412,000 the prior week.

A consensus of economists surveyed by Briefing.com expected 390,000 claims for the week.

  graphic  
     
  A big drop in May payrolls may be in the cards.  
     
  graphic  
     
  Ian Shepherdson
High Frequency Economics
 
It was the fifth consecutive gain and the biggest number of claims since 428,000 filed for unemployment in the week ended March 23, 1996, when members of the United Auto Workers union went on strike against General Motors Corp. (GM: down $0.59 to $56.01, Research, Estimates).

The jobless claims figures contrast with recent data hinting at some recovery in U.S. factory orders, manufacturing and gross domestic product, but the jobless claims are beginning to fully reflect layoffs resulting from prior weakness in those areas.

"The pattern in claims in recent months is strikingly similar to 1990 -- a long slow climb and then a sudden acceleration as layoffs accelerated," economist Ian Shepherdson of High Frequency Economics Ltd. said.

Evidence of that came in a separate report Thursday by outplacement firm Challenger, Gray & Christmas Inc., which showed companies said they were cutting 166,564 jobs in April – the fifth straight month that announced cuts topped 100,000.

Shepherdson said the government's jobless claims data won't necessarily have an impact on the April unemployment report, due Friday, but "they strongly suggest that the trend in employment growth is slowing hard. A big drop in May payrolls may be in the cards."

Four-week average at post-recession level

The four-week moving average rose to 404,500 from the previous week's revised 395,250. Economists watch the four-week moving average more closely because it gives a better reading on the health of the labor market by smoothing out fluctuations in the weekly data.

The four-week average was at its highest level since 406,750 in the week ended Oct. 10, 1992 – "the immediate aftermath of the last recession," Financial Oxygen chief economist Steven Wood said.

"Layoffs continue to rise and job creation continues to slow," Wood said.

"Higher claims suggest slower job gains, which should dampen income growth, consumer spending, and overall economic activity."

This cycle will lead the Federal Reserve to again cut interest rates, Wood said. The Fed has cut rates four times already this year in an effort to avoid a recession. graphic





graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.