Jobless Claims, Housing Starts Send Mixed Message

ByJohn S. McClenahen U.S. Labor Department data show that initial claims for unemployment insurance fell to 424,000 for the week ending Sept. 14, some 9,000 fewer claims than the revised figure of 433,000 for the previous week. However, the four-week moving average for claims increased by 7,250 to 418,500 during the week ending last Saturday. "The rise [in the four-week moving average] is big enough to suggest that hiring has petered out," says Maury Harris, chief U.S. economist at UBS Warburg LLC, New York. "We tentatively look for a 25,000 job loss and a 0.2 percentage-point rise in the jobless rate to 5.9% in the [Labor Department's] job report to be released Oct. 4." Meanwhile, the once-hot housing market is cooling a bit. August starts for privately owned housing were at an annual rate of 1.609 million, 2.2% below their July level. However, the August 2002 rate was 3% above the August 2001 rate of 1.562 million. Indeed, "we do not expect the slowing to persist," says UBS' Harris. "Respectable wage gains and slipping mortgage rates should help offset any drag on housing demand from rising prices and slowing job growth."