Jobless Claims Take a Tumble After the End of GM’s Strike

Workers returning after the General Motors Corp. strike helped trim the number of new claims for jobless benefits last week, but analysts said Thursday that the level still reflects a sluggish labor market.

First-time applications for unemployment insurance fell by 25,000 to a seasonally adjusted 408,000, the Labor Department said, well above the 367,000 level that many analysts had expected. But analysts contended that the report continued to be skewed by the effects of the strike and said a more accurate view of labor conditions will be disclosed in the department’s March employment report to be released today.

“Recent claims data are consistent with tepid job growth, but it will take a few more weeks before the effects of the GM strike completely unwind and the underlying trends on claims becomes evident,” economists at Merrill Lynch & Co. told their clients.

In advance of today’s report, analysts were expecting the unemployment rate to remain about 5.5% and predicted that fewer than 100,000 new jobs had been created last month--far less than the 705,000 reported in February.

New jobless claims had ranged in the mid-300,000s before the strike, when they shot up to 433,000 during the week ended March 23, the highest level since 523,000 claims were filed during the week ended July 25, 1992.

The four-week moving average of new weekly jobless claims continued to climb, rising by 11,250 to 394,750, highest since applications totaled 397,250 during the period ended Oct. 10, 1992. Many analysts prefer to track the less-volatile, four-week average because it smooths out the spikes in the weekly reports.

During the week ended March 23, 21 states and territories reported increases and 32 registered declines. The state data is reported a week later than the national totals.

States with the largest increases included Michigan, 33,104; Indiana, 8,453; Wisconsin, 4,923; New York, 2,892. All said most of the claims were strike-related.