Initial Jobless Claims Again Top 400,000

By John S. McClenahen Following five consecutive weeks of decline, the number of initial claims for unemployment benefits rose by 16,000 to 403,000 for the week ending July 6, reports the U.S. Labor Department. The department's Employment & Training Administration revised the seasonally adjusted number of initial jobless claims for the week ending June 29 to 387,000. The four-week moving average for initial claims increased for the week ending July 6, rising by 2,000 to 395,000 from the previous week's revised figure of 393,000. Numbers below 400,000 generally signal a stabilizing U.S. labor market. Maury Harris, chief U.S. economist at UBS Warburg LLC, New York, correctly anticipated the increase in claims for the week ending July 6. However, "we do not regard that [number] as a sign of deteriorating labor markets," he stresses. Rather, he suggests, seasonal adjustment factors aren't accurately reflecting the temporary shutdown in industries such as textiles and autos that boost jobless claims each summer. "Nonetheless, jobless claims are drifting lower only very slowly, suggesting that U.S. job markets are improving at a snail's pace," Harris contends. And that, coupled with a sinking stock market, makes it unlikely that Chairman Alan Greenspan and his colleagues on the Federal Open Market Committee are contemplating a tightening of the U.S. money supply, says Harris.

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