NATION Jobless filings rise by 13,000
Economists expect the jobless rate to climb to 6.5 percent this year.
WASHINGTON (AP) -- The number of newly laid-off Americans filing claims for unemployment benefits rose by 13,000 last week after declining for two consecutive weeks, the government reported Thursday.
The Labor Department said that 403,000 people filed new claims for jobless benefits last week, up from 390,000 new filings the week before, when claims had dropped by 48,000.
Last week's increase in jobless claims was in line with expectations. Analysts had expected a slight increase after two weeks of improvement.
The four-week moving average, which helps smooth out weekly variations, was up as well, rising by 11,250 to 418,750, the highest level for the four-week average since late September.
The nation's unemployment rate returned to an eight-year high of 6 percent in November and economists are braced for the jobless rate to hit 6.5 percent in the early part of 2003 before a gradually improving economy convinces businesses that they can begin rehiring laid off workers.
Companies have been reluctant to boost hiring or increase their capital investments in the face of continuing uncertainty about what a possible war with Iraq could do to the U.S. economy.
The U.S. economy fell into its first recession in a decade in March 2001. So far, the recovery has been proceeding in fits and starts with a strong quarter of economic growth followed by a quarter of much weaker activity. This zigzag pattern has contributed to what has so far been a jobless recovery with businesses continuing to lay off workers.
President Bush, mindful that a jobless recovery from the 1990-91 recession was a major factor in his father's 1992 defeat, has his administration working on a new economic stimulus program of further tax cuts aimed at boosting economic growth.
One of the major components of the plan is likely to be a reduction in taxes on stock dividends, a change the administration hopes will lift the fortunes of a sagging Wall Street, which just suffered its third straight down year, the first time that has happened since the late 1930s.
Bush also has urged Congress to extend unemployment benefits soon after convening next month. But he has not said if he favors a more extensive plan offered by the Senate or a House version that would cover fewer jobless workers.
Because of the impasse on this issue, an estimated 800,000 jobless workers lost their federal unemployment insurance benefits last Saturday.
They had exhausted 26 weeks of state benefits and were receiving up to 13 extra weeks from the federal government. But Congress failed to extend the program before adjourning for the year.