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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. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  2. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............

  3. Good try, Mr. Irwin, but I think we all know the primary motivation for pursuing legal action against the BMV is the HUGE FEES you and your firm expect to receive from the same people you claim to be helping ~ taxpayers! Almost all class action lawsuits end up with the victim receiving a pittance and the lawyers receiving a windfall.

  4. Fix the home life. We're not paying for your child to color, learn letters, numbers and possible self control. YOU raise your children...figure it out! We did. Then they'll do fine in elementary school. Weed out the idiots in public schools, send them well behaved kids (no one expects perfection) and watch what happens! Oh, and pray. A mom.

  5. To clarify, the system Cincinnati building is just a streetcar line which is the cheapest option for rail when you consider light rail (Denver, Portland, and Seattle.) The system (streetcar) that Cincy is building is for a downtown, not a city wide thing. With that said, I think the bus plan make sense and something I shouted to the rooftops about. Most cities with low density and low finances will opt for BRT as it makes more financial and logistical sense. If that route grows and finances are in place, then converting the line to a light rail system is easy as you already have the protected lanes in place. I do think however that Indy should build a streetcar system to connect different areas of downtown. This is the same thing that Tucson, Cincy, Kenosha WI, Portland, and Seattle have done. This allows for easy connections to downtown POI, and allows for more dense growth. Connecting the stadiums to the zoo, convention center, future transit center, and the mall would be one streetcar line that makes sense.

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