Jobless Claims Jump in State, Fall in Nation

In yet another indication of the state’s economic weakness, California led the nation in the number of new unemployment insurance claims filed in early May, while total claims fell nationally, the government reported Thursday.

In the week ended May 9, 12,013 more Californians filed new claims for jobless benefits than in the prior week. Of those, about 1,300 were due to the riots in Los Angeles and the remainder were due to layoffs in the construction industry and a new group of eligible applicants, the Labor Department said.

The rise in California came as new claims nationally declined by 20,000 from the prior week, to 406,000, ending two consecutive weekly increases and offering more evidence that the national economy continues its slow path toward recovery. In advance, analysts had expected a decline of about 9,000 claims nationally.

The latest drop in nationwide filings brought the weekly level of new claims near the six-month low of 404,000 set in mid April.

Economists said that while the new claim figures are welcome news, they cautioned that the data shows the emerging recovery continues to be slow, halting and erratic.

“In a recovery like this, companies are reluctant to engage in open-ended hiring,” said Stephen Roach, chief economist with Morgan Stanley, a New York brokerage. “So while the trend line shows definite improvement for the economy, the process has been saw-toothed, and hiring is not going gangbusters.”

Also, California’s numbers are likely to worsen in the next weekly report, in part because of the joblessness caused by the riots. In more recent data obtained from the Employment Development Department this week, riot-related unemployment claims in California through May 16 totaled 3,081, including 369 applications for special federal disaster benefits.

Economists also cautioned against reading too much into a single, weekly claims report, noting that the figures are volatile and tend to fluctuate widely.

Many economists say trends are better discerned by tracking a moving four-week average of claims, a figure that stood at 412,500 per week for the latest four-week period. The latest figure was about the same as that for the week before, 412,000, but was up from an 18-month low of 409,500, set two weeks earlier.

However, the figures do represent a marked improvement from the beginning of the year. During the first three months of 1992, new unemployment insurance claims averaged about 450,000 per week.

At what analysts and economists now believe was the worst of the recession--in late 1991--new unemployment insurance claims were being made at the rate of more than 500,000 per week.

Despite the recent drop-off in new unemployment claims, economists say the economic recovery has not generated enough momentum to make more than a slight dent in the unemployment rate. The rate slipped from a six-year high of 7.3% in March to 7.2% in April.