U.S. weekly initial jobless claims rise 6,000 to 371,000 - MarketWatch

WASHINGTON (MarketWatch) -- The number of people filing for the first time for unemployment benefits rose 6,000 to a total of 371,000 on a seasonally adjusted basis in the week ended May 10, the Labor Department reported Thursday.

The four-week average of initial claims, which smoothes out one-time factors such as bad weather or holidays, fell 1,000 to 365,750.

In the week ended May 3, the number of people collecting benefits gained 28,000 to 3.06 million, while the four-week average of continuing claims increased 15,250 to stand at 3.02 million. These levels marked the highest since March 2004 and April 2004, respectively.

John Ryding, chief U.S. economist for Bear Stearns, wrote to clients that the level of initial claims is consistent with "fairly flat payrolls" so far this month.

Ian Shepherdson, chief U.S. economist for High Frequency Economics, is expecting new highs in jobless claims over the next few months.

"The tax rebates will lift retail sales for a couple of months, but they will not change the fundamental outlook, so companies will continue to lay off staff in order to try to maintain earnings," Shepherdson wrote in a research note.

Compared with last year, both initial and continuing claims are up about 23%.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.

The insured unemployment rate, representing the proportion of those covered by unemployment insurance who are receiving benefits, remained at 2.3%.

The level of claims has been volatile in recent weeks, reaching a recent peak of 406,000 in late March.

During recessions in the past, first-time claims have typically risen to at least 400,000 and remained there. In this downturn, rather than fire workers, employers have been cutting hours and forcing them to work on a part-time basis. Last week the Labor Department reported that productivity of the American workplace increased in the first quarter, as hours worked fell 1.8% -- the biggest such decline in five years.

U.S. weekly initial jobless claims rise 6,000 to 371,000 - MarketWatch

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