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Unemployment rise 30 thousand april week { April 16 2004 } Original Source Link: (May no longer be active)
http://www.sanmateocountytimes.com/Stories/0,1413,87~11271~2088006,00.htmlhttp://www.sanmateocountytimes.com/Stories/0,1413,87~11271~2088006,00.html
San Mateo County Times
Unemployment rise doesn't worry economists
Although claims raised by 30,000 last week, analysts believe job market is rebounding
By Martin Crutsinger
Associated Press
Friday, April 16, 2004 - WASHINGTON -- New claims for unemployment benefits increased last week by 30,000, the biggest jump in 16 months. Still, analysts said Thursday they believe the labor market has turned a corner, pointing the way to a sustainable economic recovery.
The Labor Department reported that there were 360,000 newly unemployed workers filing for jobless benefits last week. Only a week earlier, the number was 330,000, the lowest in more than three years.
The increase was far above the 7,000 rise in new claims that analysts had expected. It was the largest one-week gain since December 2002, when the country was struggling to rebound from the 2001 recession.
Analysts pointed to a number of factors that skewed last week's number. For one, it was the first week in a new quarter, a time when claims often temporarily surge.
Even with the increase, jobless claims remained below 350,000 -- a level generally seen as denoting an improving job market. Also seen as encouraging was the decline of continuing claims by
22,000, to 2.98 million last week. That was the lowest since July 2001 and an indication that unemployed workers are having more luck getting work.
The best indication of the job market's improvement was the report that payroll jobs rose by 308,000 in March, the biggest one-month advance in four years and far above analysts' expectations. In addition, the government revised upward the number of jobs created in the two previous months.
Economists said that fit the typical pattern for a turning point in the economy when the numbers come in better than expected and revisions to previous months are made upward.
"We have gone from a recovery to a self-sustaining, self-reinforcing expansion," said Mark Zandi, chief economist at Economy.com.
The rebound in job creation is coming just in time, many analysts believe, because growing employment is needed to raise incomes as the impact of President Bush's tax cuts and waves of mortgage refinancing begin to wane.
Bush, who is hoping for a strong economy to aid his re-election chances, told an audience in Iowa on Thursday that his tax cuts have played an important role in boosting the economy.
Presumptive Democratic presidential nominee John Kerry said Thursday that his own economic plan would provide $225 billion more in tax cuts for the middle class than Bush has provided while scaling back Bush's tax cuts for the wealthy.
The White House, which has had to endure nearly three years of a weak labor market, is counting on bigger increases in the months ahead to bolster personal incomes and increase consumer confidence before the November election.
David Wyss, chief economist at Standard & Poor's in New York, said that given recent signs of strength, such as the surge in retail sales this week, the economy could produce between
150,000 to 200,000 jobs a month for the rest of this year.
Job growth averaging 200,000 per month through December would be needed to fully erase Bush's job's deficit.
Even with the creation of 750,000 jobs since last August, the country still has 1.84 million fewer people on payrolls than when Bush took office in January 2001.
Various signs do point to stronger growth and a resurgent labor market. But economists have begun to worry that the Federal Reserve may move sooner than expected to raise interest rates because inflation pressures, long dormant, have started to reappear.
The government reported Wednesday that consumer prices jumped 0.5 percent in March, partly from rising costs for gasoline, air travel and clothing.
Economists had been predicting the Fed would leave its federal funds rate at a 45-year low of 1 percent until after the election. Now, however, they say they expect the central bank to signal it is preparing to raise rates as early as its next meeting in May.
Wall Street fears over rate increases have helped push long-term interest rates higher. Freddie Mac, the mortgage company, reported Thursday that the nationwide average for 30-year mortgages climbed to 5.89 percent this week, compared with 5.79 percent last week. It was the fourth consecutive weekly increase.
The rise of 30,000 in benefit claims last week, after a decline of 13,000 the week before, was the biggest one-week jump since an increase of 42,000 in benefit filings the week of Dec. 7, 2002.
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