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U.S. jobless claims continue to rise

Posted at 6:47 a.m. PDT Thursday, May 31, 2001

BY LEIGH STROPE, AP Labor Writer

WASHINGTON (AP) -- New claims for unemployment benefits increased again last week, suggesting the nation's fragile labor market still is struggling.

The number of workers filing new claims for the insurance jumped 8,000 to a seasonally adjusted 419,000 for the work week ending May 26, the Labor Department said Thursday.

The increase was the third in a row, keeping claims at their highest level since April 28, when they shot up to 425,000. The week before, jobless claims climbed by 19,000 to 411,000, according to revised figures. The government previously reported that initial claims had increased 15,000 to 407,000.

However, the more stable four-week moving average, which levels week-to-week fluctuations, slipped 1,500 last week to 402,500, the lowest level since April 21.

Concerns about the sputtering job market still simmer despite a string of interest rate cuts, stronger financial markets and the prospect of tax cuts -- which all helped lift consumer confidence this month.

Many economists were predicting that Friday's report on the nation's unemployment rate for May will tick up from April's posting of 4.5 percent as businesses continued to shed jobs.

Some analysts worry that if the labor market continues to struggle, consumers might cut spending sharply and tip the country into recession. Consumer spending accounts for about two-thirds of the nation's economic activity.

The Federal Reserve Board has slashed interest rates five times this year in an effort to jump-start the economy. For the work week ending May 19, there were 31 states and territories that reported increases in new jobless claims, and 20 reported decreases. The information is a week behind national figures and is not seasonally adjusted.

The state with the biggest increase was Oklahoma, up by 2,196. Others with increases: North Carolina, 1,945; Texas, 1,849; South Carolina, 1,799; and Tennessee, 1,607.

The state with the biggest drop in claims was California, down by 3,569. Officials attributed the decrease to fewer layoffs in construction, electronics and agriculture. Others with declines: Georgia, 1,976; New Jersey, 1,236; Maryland, 887; and Pennsylvania, 701.

-- Swissrose (cellier3@mindspring.com), May 31, 2001