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February 24, 2005
The number of Americans filing first- time claims for unemployment insurance increased last week from the lowest level in more than four years.
Jobless claims increased to 312,000 for the week that ended Feb. 19, the first rise in a month, from 303,000, the Labor Department said today in Washington. The four-week average of claims, a less volatile measure, fell to 308,750, the lowest since the week of Nov. 4, 2000, from 312,000.
The level of claims suggests payroll employment is starting to accelerate. The economy probably added 225,000 workers in February, the most in four months, according to the median forecast in a separate Bloomberg survey before the March 4 report. Payrolls rose by 146,000 in January.
``We are due to see something better on employment,'' said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut, before the report. ``February should be noticeably above 200,000.''
Claims were forecast to rise to 309,000, according to the median estimate in a Bloomberg News survey of economists. The 35 forecasts ranged from 290,000 to 327,000.
The number of people continuing to collect state jobless benefits fell to 2.65 million in the week that ended Feb. 12 from 2.712 million the week earlier. The four-week average of continuing claims decreased to 2.696 million, the lowest since April 2001, from 2.736 million.
The insured unemployment rate, which tends to track the U.S. jobless rate, held at 2.1 percent. Forty-four states and territories had a decrease in claims, while nine had an increase. Continuing claims, the insured employment rate and state data are reported with a one-week lag.
Payroll Forecast
Jobless claims are at a level that's consistent with more hiring than has taken place the past three months, according to economists such as Joshua Shapiro. Job creation has fallen short of expectations as claims have declined, raising questions about the traditional relationship between hiring and firing.
``Something has to give here,'' said Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc in New York, before the report. ``Either the relationship has changed between claims and job creation, or we're going to see the payroll numbers firm up over the next few months. I don't think the relationship has changed and I hope to see a payroll number above 200,000 this month.''
Average private payrolls are forecast to rise 1.6 percent this year, exceeding the 1.3 percent gain for all of 2004, according to a survey released this week by the National Association for Business Economics.
`Looking Good'
Home Depot Inc., the world's largest home-improvement retailer, plans to open another 175 stores this year in response to increased sales, adding 20,000 workers to its current workforce of 325,000, a company spokesperson said Feb. 23.
``Things are looking good,'' Carol Tome, chief financial officer at Home Depot Inc., said in a Feb. 22 interview.
Monthly job creation averaged 181,000 a month last year, the most in five years, compared with an average of 137,000 since October. Average weekly initial jobless claims have declined to 335,310 from 342,380 since October.
One reason for the divergence may be a lack of skilled workers.
``There's lots of jobs out there, but employers can't find the qualified employees they need,'' Gina Martin, an economist at Wachovia Corp., said from Charlotte, before the report. ``There's a disconnect between the education of the people that are unemployed and the skills that employers are looking for.''
Companies continue to adjust their headcounts to limit labor costs, eliminate duplicate jobs after an acquisition, and pursue market share.
Sears, Roebuck & Co., the department-store chain being bought by Kmart Holding Corp., is cutting at least 375 jobs by June 5. Sears is based in Hoffman Estates, Illinois.
Acuity Brands Inc., which makes lighting fixtures, will cut about 1,100 jobs by the end of this year to save about $50 million annually. Atlanta-based Acuity had about 11,000 employees as of Aug. 31.
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