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Weather blamed for unexpected rise in jobless claims

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New claims for unemployment benefits jumped unexpectedly last week, mostly because state agencies processed a backlog of claims caused by snowstorms the previous week.

The severe weather also increased temporary layoffs in the weather-sensitive construction and transportation industries.

Still, the increase in claims underscored concerns that layoffs are no longer slowing as fast as they were in the second half of last year.

"The fact that these snowstorms—as bad as they were—could have such an impact is more testimony to the fragility of the recovery," Diane Swonk, chief economist at Mesirow Financial, wrote in a note to clients. "The recovery is still on thin ice and lost momentum in the first quarter."

The jobless claims report, along with economic anxiety in Europe, contributed to unease on Wall Street. In midmorning trading, the Dow Jones industrial average fell about 150 points, or about 1.5 percent. Broader stock averages also dropped.

A separate report Thursday on orders for big-ticket manufactured goods was mixed. The Commerce Department said durable goods orders shot up in January by 3 percent, the most in six months.

But that gain resulted from a surge in orders for aircraft. Excluding transportation, durable goods orders fell by 0.6 percent, a weaker showing than economists had expected.

In its report on jobless claims, the Labor Department said first-time claims for unemployment insurance rose by 22,000, to a seasonally adjusted 496,000. Wall Street analysts polled by Thomson Reuters expected a drop to 455,000.

Economists closely watch initial claims, which are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers.

Dan Greenhaus, chief economic strategist at Miller Tabak, said the claims data has been unusually distorted in recent weeks because of bad weather. As a result, "we are concerned about the upward pressure on initial claims but not overly concerned."

Still, the job market "remains quite stressed" as "robust employment growth remains elusive," he wrote in a note to clients.

The four-week average of claims, which smooths volatility, rose by 6,000 to 473,750. The four-week average has risen by about 30,000 in the past month, raising concerns that job cuts are continuing. Initial claims had fallen sharply over the summer and fall but the improvement has stalled since the year began.

The economy has grown for six months but is not yet spurring new hiring. Many economists point out that the current recovery is weak compared to the aftermath of previous deep recessions.

The Labor Department said earlier this month that while the unemployment rate fell to 9.7 percent from 10 percent, employers still cut 20,000 jobs. The economy has lost 8.4 million jobs since the recession began.

The Federal Reserve said last week that it expects the rate will average between 9.5 percent and 9.7 percent this year.

The number of people continuing to claim unemployment benefits, meanwhile, was essentially unchanged at 4.6 million. Those figures, known as "continuing claims," lag initial claims by a week.

But there are now many more people receiving extended unemployment benefits that aren't included in the continuing claims figures. Congress has provided up to 73 weeks of extra benefits, paid for by the federal government, for jobless workers who have used up the standard 26 weeks of benefits customarily provided by states.

About 5.7 million people received extended benefits in the week ended Feb. 6, the latest data available, down from more than 6 million the previous week. The extended benefit data isn't seasonally adjusted and is volatile from week to week.

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  1. Now if he'd just stay there...

  2. Daniel - what about the many US citizens who do NOT follow what the Bible teaches? The Hindus, Jews, Muslims and others who are all American citizens entitled to all rights as Americans?? This issue has NOTHING to do with "What the Bible says..." Keep all Churches separate from State! Pence's ongoing idiocy continues to make Indiana look like a backwards, homophobic state in the eyes of our nation. Can't we move on to bigger issues - like educating our kids?

  3. 1. IBJ should link to the referenced report. We are in the age of electronic media...not sharing information is lazy. Here is a link http://www.in.gov/gov/files/Blue_Ribbon_Panel_Report_July_9_2014.pdf 2. The article should provide more clarity about the make-up of this panel. The commenters are making this item out to be partisan, it does not appear the panel is partisan. Here is a list of the panel which appears to be balanced with different SME to add different perspectives http://www.in.gov/activecalendar/EventList.aspx?view=EventDetails&eventidn=138116?formation_id=189603 3. It suggests a by-pass, I do not see where this report suggests another "loop". 4. Henry, based on your kneejerk reaction, we would be better off if you moved to another state unless your post was meant as sarcasm in which case I say Well Done. 5. The article and report actually indicates need to improve rail and port infrastructure in direct contradiction to Shayla commentary. Specifically, recommendation is to consider passenger rail projects... 6. People have a voice with their elected officials. These are suggestions and do not represent "crony capitalism", etc. The report needs to be analyzed and the legislature can decide on priorities and spending. Don't like it, then vote in a new legislature but quit artificially creating issues where there are none! People need to sift through the politics and provide constructive criticism to the process rather than making uninformed comments in a public forum based on misinformation. IBJ should work harder to correct the record in these forums when blatant errors or misrepresentations are made.

  4. Joe ... Marriage is defined in the Bible ... it is mentioned in the Bible often. Marriage is not mentioned once in the US or Indiana Constitution ...

  5. Daniel - Educate me please: what does the Bible have to do with laws? If the government wasn't in the business of marriage to begin with, then it wouldn't have to "define" marriage at all. Marriage could be left as a personal, religious, or otherwise unregulated action, with no ties to taxes, legal status, etc. Then people could marry whomever they want, and all this silliness would go away. Remember to vote Libertarian in November.

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