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  • Aug 27th, 2004
  • Comments Off on US jobless claims rise on back of hurricane
The ranks of Americans filing for initial unemployment compensation swelled last week but at least half of this increase was linked to devastation wrought by Hurricane Charley earlier this month, the government said on Thursday.

Initial jobless claims, a rough guide to the pace of US layoffs, rose by a larger-than-expected 10,000 to 343,000 in the week ended August 21 from an upwardly revised 333,000 the prior week, the Labour Department said.

The figures exceeded the forecasts of Wall Street economists who in a Reuters survey projected benefit applications would total 335,000, up from an originally reported 331,000 claims.

A Labour Department spokesman said about half the rise in first-time claims was due to damage from the hurricane, which swept through parts of Florida and the Carolinas two weeks ago.

Charley, the strongest hurricane to hit the state since Hurricane Andrew in 1992, destroyed more than 12,000 homes. The citrus industry suffered some $150 million in damages.

Treasuries were largely unmoved by the data because of the hurricane anomaly.

Economists said a one-week rise in new claims for state jobless aid does not tarnish the picture of a steadily improving US labour market.

"After adjusting for Charley, the claims are consistent with what've been getting since the beginning of the year," said Mark Zandi, chief economist for Economy.com in West Chester, Pennsylvania.

"If you look at the four-week moving average, it's exactly where it was at the end of July," said Steven Wieting, senior economist for Citigroup in New York. "With some weakening (in the job market) you would expect an uptick in claims and you didn't see that until this week."

Wieting added: "You'll have to wait until after the employment report for August ... A separate component of the household survey asks people if they were unable to get to work because of bad weather."

The closely watched four-week moving average, which irons out week-to-week volatility, fell to 336,750 in the week ended August 21 from 337,500 in the previous week.

The number of Americans who continued to draw benefits after a week edged up to 2.90 million in the week ended August 14, the latest period for which data are available, from 2.89 million the week before.

Since the beginning of the year, jobless claims have been on an overall downward trend, despite week-to-week gyrations.

Economists trying to gauge the strength of the job market will be combing through the August employment report scheduled for release September 3.

Job growth disappointed in July, raising concerns that the long-awaited labour market recovery was losing steam.

A Reuters poll of US economists forecast the August unemployment rate would be flat at 5.5 percent with 150,000 new jobs created outside the farm sector. The compares to just 32,000 new jobs in July.

Copyright Reuters, 2004


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