Jobless Claims Rise More Than Expected

By John S. McClenahen Following six weeks of decline, initial claims for unemployment benefits rose to 447,000 for the week ending Dec. 29, 2001, an increase of 36,000 from the previous week's revised level of 411,000, says the U.S. Labor Department's Employment & Training Administration. Economists had expected initial claims for the Christmas week to be 392,000. The actual figure was 55,000 higher. "The bounce likely reflects a return to more normal weather, and thus does not negate recent signs that weakness in the U.S. economy is fading," says Maury Harris, chief U.S. economist at UBS Warburg LLC, New York. Indeed, the four-week moving average for claims continues to fall. It was 409,750 for the four weeks ending Dec. 29, down 8,250 from the preceding revised average of 418,000. "Still, the level of claims remains too high to stabilize the unemployment rate," Harris cautions. "Thus, the report is a reminder that the Fed may yet have to consider further ease [in U.S. short-term interest rates] and is nowhere near changing to a tightening bias."

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