U.S. Labor Market Weakens, Jobless Claims Rise By 34,000

July 24, 2008 11:38 a.m. EST

Washington, D.C. (AHN) - The number of individuals filing initial jobless claims for Worker's Compensation insurance increased last week as the labor market continued to stay weak, a report said.

U.S. weekly initial jobless claims for Worker's Compensation insurance increased by 34,000 to 406,000 on a seasonally adjusted basis in the week ending July 19, according to the Labor Department on Thursday.

While, the four-week average, which is a less volatile measure, of initial jobless claims increased by 4,500 to 382,500 in the second week of July and compared to 378,000 in the week prior.

The four-week average was between 300,000 and 325,000 for much of 2007, which is a sign of healthy job growth, while it was below 350,000 for most of the first quarter this year.

Any figure above 350,000 indicates that the labor market is weak; weekly jobless claims have remained above that level since April.

The number of continuing jobless claims dropped by 9,000 to 3.107 million for the week ending July 12.

The four-week average of continuing unemployment claims dropped by 7,000 to 3.13 million.

Market analysts surveyed by Bloomberg projected claims to rise to 380,000, according to the median of 44 projections with estimating ranging from 365,000 to 440,000.

In June, unemployment jumped to 5.5 percent, up from 5 percent in May and April, led by declining jobs in manufacturing, construction, goods-producing industries and business services.

The Labor Department report Thursday showed the unemployment rate for workers with unemployment insurance, which tends to track the U.S. jobless rate, remained unchanged at 2.3 percent from 2.4 percent in early July.

The report also said 37 states and territories registered an increase in initial jobless claims, while 16 reported a decrease in the jobless claims for the July 12 week. This data is reported with a one-week delay.

Over a six-month period, payrolls have declined for a total loss of 438,000 workers and the payroll in April and May was revised to 52,000 more jobs.

The U.S. economy has lost jobs every month since the beginning of this year and it shed 62,000 jobs in June and up to 49,000 jobs in May. Last year, the economy created on average 91,000 new jobs each month.

According to the report, New York registered the largest rise in initial jobless claims for the week of July 12 by 13,909, led by more hiring in construction, transportation and public administration.

While, Michigan reported the sharpest decrease by 4,571 due to the job cuts in auto industry.

Overall, the increase in the first-time jobless claims reflects some improvement in the U.S. economy, which has already suffered by the subprime contagion, amid weak consumer confidence and rising gas prices.