New jobless claims jump, factory orders up
New signs that the recession could be nearing a bottom emerged Thursday, as factory orders were far better than expected and the Dow industrials briefly surged over 8,000 for the first time in two months.
The Commerce Department said orders for manufactured goods rose 1.8% in February, reversing six straight monthly declines and easily beating estimates of another drop. Other economic indicators came in better than expected Wednesday, including construction spending and pending home sales.
Still, the job situation remains grim. Traditionally, the labor market doesn’t pick up until well after a recovery has started.
The monthly unemployment report due out today probably will be dismal, and data on new jobless claims reported Thursday were worse than expected.
The Labor Department said initial claims for unemployment insurance rose to a seasonally adjusted 669,000 from the previous week’s revised figure of 657,000. That total was above analysts’ expectations and the highest in more than 26 years, though the workforce has grown by about half since then.
The tally of laid-off workers claiming benefits for more than a week rose 161,000 to 5.73 million, setting a record for the 10th straight week.
That also was above analysts’ expectations and indicates that unemployed workers are having difficulty finding new jobs. The continuing-claims data lag behind the initial claims by one week.
An additional 1.5 million people received benefits under an extended unemployment compensation program Congress approved last year. That is as of March 14, the latest data available. Jobless benefits typically last 26 weeks, but the federal government is paying for an additional 20 to 33 weeks of compensation under the extended program, depending on each state’s unemployment rate.
As a proportion of the workforce, the number of people on the jobless benefit rolls is the highest since May 1983. The four-week moving average of jobless claims, which smooths out weekly volatility, rose to 656,750, the highest since October 1982, when the economy was emerging from a steep recession.
Economists forecast that today’s report will show that employers cut 654,000 jobs in March, while the unemployment rate increased to 8.5% from 8.1%, according to a survey by Thomson Reuters.
Delinquencies among consumer loans continued to rise during the fourth quarter because of mounting job losses, according to data released by the American Bankers Assn.
