Economist Keeping His Eye On U.S. Jobless Claims

ByJohn S. McClenahen Having come down from earlier marks above 400,000, initial claims for U.S. unemployment insurance seem now to be holding at about 390,000 a week. (They were 389,000 for the week ending Aug. 17, the most recent data available from the U.S. Labor Department.) That stabilization, says Maury Harris, chief U.S. economist at UBS Warburg LLC, New York, would be consistent with the "modest" GDP growth he expects for the second half of 2002. Harris is forecasting inflation-adjusted growth at an annual rate of 2.5% in the current calendar quarter and 3% in this year's final quarter. "Should the downtrend in claims become an uptrend, however, both the Fed and we would have cause for concern," cautions Harris. The reason: rising claims could signal that the U.S. has again gone into recession -- the second part of the so-called double dip. "We do not expect that outcome," stresses Harris. "But stay tuned," he adds.