Jobless Claims Show No Sign Of Manufacturing Upturn

ByJohn S. McClenahen As they have for 14 consecutive weeks, initial claims for unemployment benefits remained above 400,000 last week. Indeed, contrary to the decline that economists generally expected, initial claims for the week ending May 17 rose to 428,000, an increase of 7,000 from the previous week's revised figure of 421,000, says the U.S. Labor Department. "The rise in jobless claims is concentrated in states that have an above-average percentage of manufacturing employment," notes Stan Shipley, a senior economist at Merrill Lynch & Co., New York. "If the [U.S.] economy is truly on an upswing, then the cyclical manufacturing sector should be turning up. [But] the state data gives no hint of that occurring." This could mean Labor Department employment data slated for release on June 6 will show the U.S. economy shed still more jobs during May and the overall rate of joblessness increased. In fact, Maury Harris, chief U.S. economist at UBS Warburg, New York, expects the data to show another 50,000 jobs were lost in May and the unemployment rate rose one-tenth of a percentage point to 6.1%.