U.S. Jobless Claims Plunge, Outlook Brightens

By Agence France-Presse New American jobless numbers slumped last week, government data showed Feb. 19, raising tentative hope for the unemployed. The number of new claims for unemployment benefits dropped by 24,000, far more than predicted by economists, to 344,000 after being adjusted for seasonal blips, the Labor Department said. A thaw in near-Arctic temperatures that gripped parts of the country may have helped, analysts said, allowing activity such as construction to pick up and reversing a deterioration in previous weeks. "These numbers provide strong support for the Labor Department's assertion that the increase in claims over the previous two weeks was due to severe weather," said Ian Shepherdson, chief U.S. economist for High Frequency Economics. Jobs growth has stubbornly refused to match a sharp expansion in the economy, which grew by a 19-year record 8.2% in the third quarter of 2003 and a still-solid 4.0% in the last quarter. U.S. businesses hired 112,000 extra people in January -- disappointing economists who had expected a much steeper rise. The increase was still a three-year record, however. The unemployment rate dipped to a two-year low of 5.6%, from 5.7% in December. Copyright Agence France-Presse, 2004