Initial jobless claims up 10,000 in a week

Half of new filings related to impact of hurricane on Florida, Labor Dept. says

August 27, 2004|By BLOOMBERG NEWS

WASHINGTON - Initial unemployment claims rose last week for the first time in four weeks, boosted by more filings related to Hurricane Charley, a government report showed yesterday.

First-time applications for unemployment benefits rose by 10,000 to 343,000 in the week that ended Aug. 21 from a revised 333,000 the week before, the Labor Department said. About half the gain was attributed to the storm, a Labor spokesman said.

Hurricane Charley, which struck southwest Florida on Aug. 13 and caused 20 deaths and about $7.4 billion in insured losses, was the strongest storm to hit the state since Hurricane Andrew more than a decade ago. Initial claims rose by 10,000 the week that Andrew came ashore in August 1992 and by 8,000 the next week.

"We may see some additional upward pressure for another two weeks," from job losses related to the hurricane, said Henry Willmore, chief U.S. economist at Barclays Capital Inc. in New York. "The peak effect usually comes in the second week."

Claims had been expected to rise to 335,000 last week, the median of 41 forecasts in a Bloomberg News survey, from an originally reported 331,000. Estimates had ranged from 320,000 to 370,000.

Since rising to 350,000 in early July, initial claims have declined, suggesting an improving labor market. Employment in August is forecast to accelerate after slowing in the previous two months, according to economists in a Bloomberg News survey.

The four-week moving average, a less volatile measure, fell to 336,750 from 337,500, the Labor Department said. That compares with an average of 402,000 for all of last year.

"A sustained pickup in employment is, understandably, viewed as key to keeping consumer spending growing at a solid pace, especially since the stimulus from tax cuts is past its peak," James O'Sullivan, senior economist at UBS Securities in Stamford, Conn., said before the report was released.

On Sept. 3, the Labor Department is expected to report a 160,000 increase in August employment. That compares with an average of 55,000 new jobs in June and July and 225,400 for the first five months of the year.

The number of people continuing to collect state unemployment benefits rose to 2.897 million in the week that ended Aug. 14, down slightly from 2.892 million the prior week. The four-week moving average of continuing claims fell to 2.895 million from 2.907 million.

The insured unemployment rate, which tends to move with the jobless rate, held at 2.3 percent. Seven states and territories reported an increase in claims, while 46 had a decrease in the week that ended Aug. 14. Figures on continuing claims and the insured jobless rate are reported with a one-week lag to initial claims.

The volume of help-wanted advertising in major U.S. newspapers fell for a third straight month in July, the Conference Board reported yesterday. The index measures advertising volume in 51 papers, though it doesn't include ads placed on the Internet.

Hurricane recovery efforts are expected to create more jobs in southwest Florida than were lost to Charley over the next two years, economists said. The region will lose 20,000 to 30,000 jobs as a result of the storm, though it may gain 30,000 to 45,000 from the recovery effort, said Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, N.C.

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