WASHINGTON Nearly half a million laid-off workers filed newjobless claims three weeks before Christmas, the government saidtoday, suggesting at best a stagnant economy and at worst a reneweddecline.
Among the states, Illinois racked up the third-highest total ofnew claims with 19,300.
But in a rare bright spot in an otherwise gloomy picture, theCommerce Department said record exports shrank the nation'smerchandise trade deficit by 2.9 percent to a seasonally adjusted$6.73 billion in October.
For the week ended Dec. 7, Americans filed a seasonally adjusted493,000 new claims for unemployment insurance, 79,000 more than theweek before, the Labor Department said.
"It's consistent with this evidence that the economy is justsort of hanging in there somewhere between stagnation and slightslippage," said economist Robert Dederick of Northern Trust Co. inChicago. "The expansion has stalled and the risks are all on thedown side."
An even more pessimistic Bruce Steinberg of Merrill Lynch said,"I think the economy is declining right now. I don't think we'rejust stalled out."
Economists were cheered by the better-than-expected trade reportbut warned that economic sluggishness abroad will restrain U.S.export sales through much of next year.
In a move likely to further dampen European growth, Germany'scentral bank today raised two key interest rates by half a percentagepoint. The Bundesbank is trying to head off inflationary pressuresas Germany borrows heavily to finance its unification.
Despite the over-all trade improvement, the deficit with Japanjumped 11 percent to $4.64 billion, the biggest imbalance sinceFebruary, 1989.
President Bush today met with business leaders accompanying himon a trip to Asia later this month. Bush hopes to prod Japan intoopening its markets to American goods.
"That means the same three words: jobs, jobs and jobs," Bushsaid.
Among the executives meeting with the president was GeneralMotors Corp. Chairman Robert Stempel, who announced Wednesday that GMwould shut 21 factories and eliminate 74,000 jobs over the next fouryears.
The number of new unemployment claims during the first week ofDecember matched the 493,000 filed during the first week of Novemberand approached the levels last seen during the depths of therecession earlier this year. It brought the total number of peopledrawing benefits to 3.48 million.
The initial-claims level hit an eight-year high in March of540,000 and then shrank to around 400,000 in July before starting toclimb again.
Analysts had expected an increase in the latest report, becausethe occurrence of Thanksgiving the previous week had left workerswith one less day than usual in which to file claims. But the 79,000rise was about double what they were predicting in advance.
Economists caution against reading too much into week-to-weekfluctuations in the highly volatile claims numbers. But they havewatched with concern as the four-week running average has creptsteadily higher since midsummer.
The average during the latest four-week period was 449,000, upfrom 443,500 the previous four weeks. The five states with thelargest increases in initial unemployment insurance claims for theweek ending Dec. 7 were California, 30,900; North Carolina, 19,700;Illinois, 19,300; Pennsylvania, 16,000, and Ohio, 10,400.
The early December jump could be a harbinger of bad news whenthe unemployment figures for the entire month are released Jan. 10.The level was 6.8 percent in November and analysts fear that it couldreturn to the 7 percent it hit earlier in the recession.
Meantime, the Veterans Affairs Department said it was cutting ahalf percentage point from the maximum rate on VA-guaranteedmortgages, lowering it to 8 percent effective tomorrow. That is thelowest since May, 1977.
"The drop in the rate will have the practical effect ofstimulating the economy and boosting the housing industry by allowingmore veterans to qualify for loans," said VA Secretary Edward J.Derwinski.
No comments:
Post a Comment