Unemployment claims bucking downward trend, adds over 25,000

Unemployment claims top 400,000 again

Unemployment claims for first time filers rose 25,000 for the week ended February 12 to 410,000  reversing the trend that they were already decreasing amid a recovering job market.

The Labor Department reported that continuing claims increased 1,000 in the week ended February 5. That brought the total for those seeking a second week of benefits to 3,911,000.

Since August 2010 when it topped 500,000, unemployment claims were steadily decreasing. The sudden increase may be partly affected by the consecutive snow storms that hit the Midwest and East Coast recently, the Labor Department said. Adverse weather delays the filing of claims and can cause a spike in the numbers as soon as people complete the paperwork as the weather clears.

Initial claims had a moving average of 417,750, up from last week's average of 416,000. The moving average is a good indicator of the job market as it softens the impact of things like adverse weather and holidays on the overall data.

Last Wednesday, economic growth forecast was upgraded by the Fed who also said the unemployment rate will likely remain at 9 percent.

The unexpected hike in claims brought stocks down Thursday after the Labor Department report was announced.

Increasing gas and food prices drove up consumer prices last month as the Consumer Price Index gained 0.4 percent, slightly up from the estimated 0.3 percent.

Economists are still optimistic that jobless claims will continue to slide overall as the U.S. economic recovery gains momentum. Yet some are saying the relationship has weakened between real job growth and unemployment claims.

Posted by James Fried on Friday February 18 2011, 3:42 AM EST. Ref: Washington Post. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0