- The Washington Times - Thursday, March 4, 2004


The number of people filing new applications for unemployment benefits dropped last week, a sign that companies may be feeling better about the economic recovery’s durability and less inclined to lay off workers.

The Labor Department reported yesterday that for the workweek ending Feb. 28 new filings for jobless benefits declined by a seasonally adjusted 7,000 to 345,000, the lowest level in two weeks. The decline was a bit steeper than the decrease of 5,000 that some analysts were forecasting.

Another report from the department said the productivity of American workers grew at a modest 2.6 percent annual rate in the final three months of 2003, according to revised figures. The new figure, which matched economists’ expectations, was slightly slower than the 2.7 percent pace first estimated a month ago.

Productivity measures the amount a worker produces for each hour on the job. For all of 2003, productivity grew by a solid 4.4 percent, compared with a 5 percent increase for 2002.

Although the fourth quarter’s performance marked a slowdown from a sizable 9.5 percent growth rate in the previous quarter, it still represented a respectable pace that bodes well for the economic recovery.

The Commerce Department reported that orders to U.S. factories dropped by 0.5 percent in January, mostly reflecting weak demand for transportation equipment, especially airplanes. Excluding orders for transportation equipment, however, factory orders rose by a firm 1.4 percent.

In the layoffs report, the four-week moving average of claims, which smooths out weekly fluctuations, dipped last week to 352,250, a decrease of 3,000 from the previous week.

But even as companies have reduced the speed at which they lay off workers — they haven’t been in a rush to hire people.

A Federal Reserve survey of business conditions across the country in January and February, released Wednesday, said employment was “growing slowly” in most Fed regions.

Looking ahead, Federal Reserve Chairman Alan Green-span is optimistic that job growth will speed up.

“We could get a pop in employment at any time,” Mr. Greenspan said last week.

Slow job growth has been a sore spot for President Bush and is an election-year issue that Democrats have seized upon as evidence of what they believe to be Mr. Bush’s poor handling of the economy.

The economy has lost 2.2 million workers since Mr. Bush took office in January 2001 as the economy fell into a recession, struggled to get back on its feet, and then staged a material rebound in the second half of last year.

Economists believe that productivity gains were a factor in the job losses. During a period of economic uncertainty, those productivity gains allowed companies to produce more with fewer people. In economic good times, productivity gains usually don’t come at the expense of workers.

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