- The Washington Times - Thursday, January 30, 2003

WASHINGTON, Jan. 30 (UPI) — The Labor Department said Thursday new claims for state unemployment benefits during the week ended Jan. 25 rose by 14,000 to a seasonally adjusted annual rate of 397,000.

Economists on Wall Street were expecting first-time claims to rise by 4,000 during the week.

Since reaching a high for the year in March of last year of more than 500,000, jobless claims have been hovering between 375,000 and 400,000. Generally, economists associate the 400,000 level as the dividing line between a strengthening and weakening labor market.

New claims for unemployment benefits have stayed below 400,000 for the past month, suggesting the weakness in the job market may be abating.

Economists pay particular attention to the jobless claims report, often one of the first signals the economy has reached bottom. Investors watch claims because they are an easy way to gauge the strength of the job market.

By tracking the number of jobless claims, investors can gain a sense of how tight the job market is. If wage inflation threatens — a result of there being too few workers for the available jobs — interest rates will likely rise and bond and stock prices will fall.

The latest report from the Labor Department showed the 4-week moving average of claims, considered a more reliable indicator because it eliminates week-to-week fluctuations, fell to 384,000 from 387,000 during the prior week.

The Labor Department said the number of workers drawing unemployment benefits for more than a week fell to 3.289 million from 3.345 million during the latest week for which that information is available.

The unemployment rate for workers with unemployment insurance held steady at 2.6 percent. The ratio represents people claiming benefits as a percentage of the workforce potentially eligible for these benefits.

The Labor Department also said that five states and territories reported an increase in new claims during the week that ended Jan. 18, while 48 states and territories reported a decline.

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