U.S. Weekly Jobless Claims Unexpectedly Rise To Five-Year High Last Week

July 31, 2008 12:43 p.m. EST

Washington, D.C. (AHN) - The number of individuals filing initial jobless claims for insurance unexpectedly increased to five-year high during the last week, a report said.

U.S. weekly initial jobless claims for unemployment insurance increased by 44,000 to 448,000 on a seasonally adjusted basis in the week ending July 26, according to the Labor Department on Thursday.

While, the four-week average, which is a less volatile measure, of initial jobless claims increased by 11,000 to 393,000 in the third week of July and compared to 382,000 in the week prior.

The four-week moving 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 still weak; the weekly jobless claims have remained above that level since the month of April this year.

The number of continuing jobless claims surged by 185,000 to 3.282 million for the week ending July 19, the highest level since December 2003, compared to 3.097 million the prior week.

The four-week average of continuing unemployment claims also moved up by 42,750 to 3.17 million.

Market analysts surveyed by Bloomberg projected claims to fall to 393,000, according to the median of 40 projections with estimating ranging from 375,000 to 440,000.

In June, the unemployment rate jumped to 5.5 percent, up from 5 percent in May and April, led by the 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 2.5 percent from 2.3 percent early July.

The report also said 13 states and territories registered an increase in initial jobless claims, while 40 reported a decrease in jobless claims for the July 19 week. This data is reported with a one-week delay.

Over the period of six months, payrolls have now declined for a total loss of 438,000 workers and the payroll in the month of 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 as much as 62,000 in the month of June and up to 49,000 jobs in May. Last year, the economy created as much as 91,000 new jobs each month on average.

According to the report, Florida registered the largest rise in initial jobless claims for the week of July 19 by 4,178, led by more layoffs in construction, trade, and service industries.

While, New York reported the sharpest decrease by 20,450 due to fewer job cuts in construction, service, transportation and public administration sectors.

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