Analysts Shrug Off Rise in New Jobless Claims

The number of Americans filing new claims for unemployment benefits soared last week, after falling to an 18-month low the week before, a government report released Thursday showed. But analysts see the jump as a weather-related or seasonal fluke and said the U.S. economy is starting 1999 with a strong labor market.

First-time jobless claims rose by 79,000 to a seasonally adjusted 368,000 for the week ended Dec. 26, the Labor Department said. Jobless claims have been volatile in the last month, however. Last week’s increase was the biggest in six years. It followed a drop of 11,000 the previous week to 289,000--the lowest since July.

“The great American job machine isn’t broken,” said Ken Goldstein, a Conference Board economist in New York. “It isn’t even slowing.”

Other reports Thursday reinforced that. Figures from the Conference Board showed U.S. companies stepped up their efforts to recruit workers in November. The New York-based research group said its index of help-wanted advertising in major newspapers rose to 91 last month from 87 in October. And private surveys of purchasing managers in Chicago and New York showed business picking up in those metropolitan areas.

The Labor Department was unable to explain last week’s increase in first-time jobless claims, but cautioned that “changes for any one week aren’t necessarily indicative of directional changes in the economy.”

Wall Street analysts said the government’s formula for adjusting for seasonal variations may be flawed, and that the Christmas holiday and bad weather may have skewed the numbers.

Employment gains in 1999 will be smaller than this year’s, most analysts said. U.S. companies are expected to add 1.5 million to 2 million jobs, compared with 2.5 million added for all of 1998, according to Robert Dederick, an economic consultant at Northern Trust Co. in Chicago.

The weekly average for new claims over the last two months is about 320,000--close to the 317,000 average for all of 1998.

The unemployment rate was 4.4% in November, just above a 28-year low. Analysts expected it to rise just a tenth of a point to 4.5% in December.

The four-week average for new jobless claims--which smooths out the volatile weekly data and is more closely watched--rose to 321,750 last week from a revised 307,750 the previous week, the Labor Department said. Also, the total number of people receiving unemployment benefits rose by 17,000 to 2.23 million in the week ended Dec. 19.