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Mid-Month Rise in Jobless Claims Surprises Analysts : Labor market: Instead of falling, unemployment rises slightly, indicating economy’s slow expansion.

From Associated Press

The number of Americans filing new claims for jobless benefits unexpectedly rose in mid-December, the government said Thursday in a report seen as further illustrating the slow pace of the economic recovery.

“The data reinforces the point that the improvement in the labor market will be gradual,” said Marilyn Schaja, an economist with Donaldson, Lufkin & Jenrette Securities Corp. in New York.

New applications for unemployment insurance were up 12,000, to 360,000, during the week ended Dec. 12, the Labor Department said. It was the second straight advance and pushed claims to the highest level since they were at 362,000 during the week ended Nov. 21.

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Many analysts had expected the number to fall slightly.

Nevertheless, initial claims remained under 400,000 for the 12th week in a row. Many analysts believe that the employment situation will improve if the number holds below that threshold.

Indeed, the jobless rate dipped to 7.2% in November from 7.4% a month earlier and the recent peak of 7.8% last June, the department reported earlier. At the same time, it said 105,000 new jobs were created.

And, it said Thursday, the four-week moving average of new claims did drop during the latest reporting week, from 352,250 to 348,750. That was the lowest level since the average stood at 345,750 during the period ended May 26, 1990.

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Many analysts prefer to track the four-week average because it smoothes out the erratic weekly changes and is considered a more reliable indicator of the labor situation.

The department said the number of individuals filing new claims under a special emergency unemployment program also fell during the week ended Dec. 12, to 24,528 from 26,509 the previous week.

These applications are not included among the regular initial claims. And unlike the regular claims figures, the emergency program numbers are not seasonally adjusted.

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Sixteen states and territories reported increases in weekly claims, while 37 reported declines.

States reporting the largest increases were California, 3,554; Ohio, 2,337; Alabama, 1,418; Connecticut, 1,384, and West Virginia, 946.

There was no explanation for the increases in California, Connecticut and West Virginia. Ohio attributed its increase to layoffs in the automobile industry, while Alabama had more layoffs in the apparel and trade industries.

States registering the largest decreases were Pennsylvania, 6,973; Virginia, 3,651; New York, 3,059; Tennessee, 2,570, and South Carolina, 2,535.

Pennsylvania had fewer layoffs in the construction, machinery and primary metals industries. Virginia cited fewer layoffs in the electrical equipment, textile, furniture and food processing industries.

Tennessee said it had fewer layoffs in the construction, mining, paper, food processing, leather goods, textile, apparel, rubber, fabricated metals, industrial machinery, transportation, electronic equipment and trade industries.

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South Carolina attributed its decline to fewer layoffs in the textile industry. There was no explanation for the decrease in New York.

The national figures are adjusted for seasonal variations, but the individual state figures are not.

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