- The Washington Times - Thursday, February 18, 2010

UPDATED:

The U.S. job market isn’t improving as fast as some analysts had expected.

That was the message Thursday in a government report that the number of people filing first-time claims for unemployment benefits rose unexpectedly last week. Jobless claims rose by 31,000 to a seasonally adjusted 473,000.

The increase followed a drop of 41,000 in the previous week. The earlier figure had raised hopes that the job market was improving steadily.

The four-week average for claims dipped 1,500 to 467,500, near the lows at the end of last year. The average smooths out week-to-week volatility, but many economists say the four-week average would need to fall consistently below 425,000 to signal that the economy is close to generating net job gains. The economy has lost 8.4 million jobs since the recession began in December 2007.

Further evidence that the pace of the economic recovery is slowing was a private research group’s forecast of economic activity. The Conference Board’s index of leading economic indicators rose for a 10th straight month in January, but the rate of increase is easing. The index is designed to forecast activity in the next three to six months.

Many economists have raised concern that growth will stagnate this year as government support programs wind down and unemployment remains high.

Analysts say the closing of businesses and government offices last week because of snowstorms might have prevented some newly unemployed workers from filing their initial claims for unemployment benefits.

The figures were collected as the government also was gathering information for the February report on the unemployment rate and employer payrolls. The severe weather may distort those figures, too, economists said. That could make it hard to get an accurate picture of the job market for several weeks.

Even so, some analysts said the latest figures are a cautionary signal.

“At least for the moment, the trend in layoffs seems at best to have leveled off — and perhaps to have begun a renewed increase,” Pierre Ellis, an economist at Decision Economics, wrote in a research note.

Manufacturing has been among the few pockets of strength in the economy, but many other industries in the much larger service sector remain weak.

“Strong manufacturing is not enough to support the labor market as a whole, it seems,” said Ian Shepherdson, an economist at High Frequency Economics.

A third report Thursday said wholesale prices shot up at double the expected pace in January. But the surprising surge was viewed as a temporary blip and not a signal of sustained inflation. The Labor Department said wholesale prices rose 1.4 percent, but most of the increase was due to a jump in gasoline prices, which surged 11.5 percent.

Core inflation at the wholesale level, which excludes energy and food, rose 0.3 percent, but that, too, was due mainly to a single volatile category: light trucks.

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