- The Washington Times - Thursday, March 6, 2003

WASHINGTON, March 6 (UPI) — The Labor Department on Thursday reported that new claims for state unemployment benefits during the week ended March 1 rose to their highest level of the year.

The government agency said first time claims jumped by 12,000 to a seasonally adjusted annual rate of 430,000 — the highest level since 438,000 workers were seeking benefits during the week ended last Dec. 14.

Economists on Wall Street were expecting first time claims to fall by 13,000 during the week.

Since reaching a high in March of last year of more than 500,000, jobless claims have been hovering between 360,000 and the low 400,000 levels. Generally, economists associate the 400,000 level as the dividing line between a strengthening and weakening labor market.

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, or how loose, the job market is. If wage inflation threatens, it's a good bet that interest rates will rise, bond and stock prices will fall.

The latest report from the Labor Department showed the four-week moving average of claims, considered a more reliable indicator because it eliminates week-to-week fluctuations, went up by 9,000 to 408,750 from 399,750 a week earlier.

The Labor Department said the number of workers drawing unemployment benefits for more than a week rose by 180,000 to 3.516 million during the latest week for which that information is available.

The unemployment rate for workers with unemployment insurance rose to 2.8 percent from 2.7 percent. The ratio represents people claiming benefits as a percentage of the workforce potentially eligible for these benefits.

The Labor Department also said that 14 states and territories reported an increase in new claims during the week that ended Feb. 22, while 39 states and territories reported a decline.

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