Rise in Jobless Claims Surprises Economists
Economists were surprised and experts are making excuses for the numbers, saying the Easter holiday (as well as Cesar Chavez Day in Califorornia) delayed the processing of claims and created a backlog. The Journal's MarketWatch quotes a Labor Department official saying: "I don't think there is a whole lot of layoffs going on."
Mike Feroli, economist at JP Morgan Chase Bank, told the Associated Press the rise was "a puzzle against the backdrop of generally improving economic data." Some experts, including Federal Reserve Chairman Ben Bernanke, suggest worker productivity may be to partly to blame for the sluggish job market.
Whatever the case, any rate of initial unemployment claims over 400,000 a week reflects a weak job market where too many employers are forced to cut employees and others are reluctant to hire.
To provide some perspective, it's true that every year the Easter holiday tends to distort the rate of initial unemployment claims by 10,000 or 20,000 for a few weeks. But throughout the 1990s and 2000s, volatility or not, the seasonally-adjusted rate of initial claims per week does not rise above 400,000 except in bad economic times - years like 1991, 1992, 2001, 2002, and 2003.
The four-week moving average of initial unemployment claims, which tends to correct for factors like shorter work weeks or unusual weather, was 457,750. That's still far too high. The rate of initial claims has stubbornly hovered in the 400,000s all year.
Where are these layoffs coming from? Places like Pennsylvania, which had had an addition 5,314 layoffs in the construction, service, food, and transportation industries compared to last week. New Jersey, Illinois, and Nevada also had sharp increases in layoffs.