Jobless Claims Drop, But May Not Signal Early Recovery

By John S. McClenahen Instead of increasing by about 35,000, as was expected, first-time claims for unemployment decreased by 11,000 in the week ending Dec. 15. Claims totaled 384,000, says the U.S. Labor Department's Employment & Training Administration. The agency's four-week moving average for initial claims also fell, down to 438,000 from 450,250 for the week ending Dec. 8. If jobless claims were to remain at their Dec. 15 level, first-quarter 2002 GDP would end up in positive rather than negative territory, relates Gerald D. Cohen, a senior economist at Merrill Lynch & Co., New York. "However, we don't think that is [going to be] the case as substantial layoff announcements continue," states Cohen. "Furthermore, jobless claims tend to give a false signal of improvement in the middle of recessions before deteriorating again."

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