US jobless claims rise but suggest strength in market

03/03/06 - newratings.com

NEW YORK, March 3 (newratings.com) – Initial jobless claims in the US rose by 15,000 last week, according to government data released on Thursday.

First-time claims for US jobless benefits rose to 294,000 in the week ended February 25, from an upwardly revised 279,000 for the previous week, the Labor Department said. The four-week average of initial jobless claims, which smoothens out fluctuations due to onetime events, rose by 5,250 to 287,250. Continuing claims for state unemployment insurance aid fell, however, to 2.5 million in the week ended February 18, hitting their lowest level in five years, according to the Labor Department.

Reuters quoted Patrick Fearon, senior economist for AG Edwards & Sons in St Louis, as saying that the figures showed "considerable strength in the labor market." Stephen Stanley, chief economist for RBS Greenwich Capital, added, "The bottom line is that layoffs are slowing, which bolsters our view that the economy is strong and that consumers will see fatter paychecks this year," according to MarketWatch.

Meanwhile, a report by the Chicago-based outplacement firm Challenger, Gray and Christmas revealed a 19% year-over-year decline in corporate layoffs announced by US employers in February, Bloomberg said.