The number of U.S. workers
filing new claims for state unemployment benefits rose more than
expected last week.
States received 387,000 initial applications, up 20,000, the
Labor Department said. The increase was the first in three weeks.
Claims surged early last month, when General Motors Corp. and
Ford Motor Co. closed at least 69 North American plants to retool
for the 2003 model year. Reports from subsequent weeks may have
been distorted by attempts to adjust for seasonal closings in the
auto industry, economists said.
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“We all know this is a volatile series and bounces around
from week to week,” said William Sullivan, senior economist at
Morgan Stanley in Jersey City, New Jersey. “The message seems to
be the labor market has stabilized and the peak period of
deterioration was in the second quarter.”
While the four-week moving average of claims, a less-volatile
measure, rose to 386,000 from 385,750, it has been lower than
400,000 since mid-June. That indicates the pace of layoffs has
slowed from earlier this year. The number of workers continuing to
receive benefits rose in the week that ended July 20. It was the
first increase since early June, and the level is down from
earlier this year.
Some companies have stepped up their hiring plans. Microsoft
Corp. and General Motors are among those adding workers.
Economists had expected jobless claims to rise to 374,000
last week from a previously reported 362,000, based on the median
of 24 forecasts in a Bloomberg News survey.
Continuing Claims Rise
The number of people continuing to collect benefits rose by
5,000 to reach 3.502 million in the week that ended July 20.
Continuing claims peaked this year at 3.833 million, in the week
that ended May 4.
The insured unemployment rate was unchanged at 2.7 percent.
That measure of the number of people receiving benefits as a share
of those employed tends to track the overall jobless rate.
The Labor Department also said that four states and
territories reported an increase in new claims during the week
that ended July 20, and 49 reported a decrease. Details on states,
continuing claims and the uninsured unemployment rate are reported
with a one-week lag to initial claims.
The claims figures come a day before the government releases
its monthly figures on July employment. The jobless rate probably
held at 5.9 percent, and the economy probably added 60,000 jobs,
the third straight month of job gains. That hasn’t happened since
five months of increases from November 2000 to March 2001.
Job Creation
Microsoft, the world’s largest software maker, says it will
increase research and development spending by 21 percent to $5.2
billion this year and will hire 5,000 new workers.
“It’s an aggressive approach, but one I believe in and am
very excited about,” Chairman Bill Gates told analysts at a
conference at the company’s Redmond, Washington, headquarters last
week.
General Motors plans to hire as many as 100 more scientists
and engineers in upstate New York as the largest automaker
prepares to build hundreds of thousands of fuel-cell autos a year
by 2010.
The Detroit-based company already employs 200 scientists and
engineers at its fuel-cell research center in Honeoye Falls, New
York, a suburb of Rochester. General Motors also employs 300 fuel
cell researchers in Warren, Michigan, and Mainz-Kastel, Germany.
Some manufacturers are still eliminating positions. Intel
Corp. said earlier this month it will cut 4,000 jobs, or 4.8
percent of its staff, after a prolonged slump in demand for
personal computers caused second-quarter sales at the world’s
biggest chipmaker to fall below analysts’ forecasts.
Avaya Inc., the biggest U.S. maker of office telephone
equipment, said last week it is cutting 2,500 jobs, or 12 percent
of its workforce. Alcoa Inc., the world’s biggest producer of
aluminum, said yesterday it plans to eliminate 377 jobs at a
Badin, North Carolina, plant in response to declining prices and
increased competition.
Bloomberg News
