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Job Claims Post Third Straight Rise

First-time filings for unemployment benefits stay at a level signaling a softening labor market.

September 12, 2003|Jesus Sanchez | Times Staff Writer

The number of people filing first-time unemployment claims climbed unexpectedly last week for a third consecutive increase, underscoring the persistent weakness in the nation's job market despite an improving economy.

In its weekly report, the U.S. Labor Department said Thursday that initial claims for jobless benefits rose in early September to a seasonally adjusted 422,000 -- well above the benchmark level of 400,000. Economists say anything above that threshold signals a weakening job market.

For a brief time in the summer, the weekly claims figure fell below 400,000. But the increase in recent weeks suggests that employment remains elusive for many people.

"It appears that job creation is still not imminent," said economist Steven Wood in a report for Insight Economics, a consulting firm in Danville, Calif.

Indeed, the labor market remains a critical missing link in an economy that is otherwise showing signs of accelerating growth. A separate government report Thursday found there was a slight increase in the nation's trading activity in July.

Claims data for the week ended Sept. 6 weren't available at the state level. California's labor market generally has been tracking the nation's.

Since the end of 2000, nonfarm payrolls in California have declined by 1.8%, or about 265,000 jobs. The state's jobs report for August, scheduled to be released today, is expected to show another month of net employment losses. Last week, the government said employers in the nation cut a net 93,000 jobs in August.

Economists predict that employment conditions in California and across the nation will begin strengthening in the coming months.

Esmael Adibi, director of the Center for Economic Research at Chapman University, said the northern part of the state, which is heavily dependent on the hard-hit technology industry, is expected to lag behind Southern California, which has a more diverse economy and has suffered fewer layoffs.

Still, the latest weekly claims data for the nation were not encouraging -- and could be an early indicator that the labor market would remain weak in September.

For the week ended Sept. 6, the number of initial claims rose 3,000 from the previous week to 422,000. The four-week moving average of initial claims -- which smooths out weekly fluctuations -- was 407,250, an increase of 4,500 from the previous week's revised average.

In a separate report, the U.S. Commerce Department said that the nation's exports and imports posted an increase in July from the previous month's revised figures. Imports grew more than exports, however, leading to a $300-million increase in the nation's trade deficit to $40 billion.

Exports grew to $86.1 billion in July, up $1.7 billion from June, with much of the increase coming from shipments of capital goods, industrial supplies and materials, vehicles and automotive parts, and food. Imports posted an increase of $2 billion to $126.5 billion as U.S. consumption of industrial supplies, consumer goods and food rose.

The July trade gaps with China ($11.3 billion) and Western Europe ($11.2 billion) were the largest on record, according to analysts. The Commerce Department reported relatively small trade surpluses with only four countries: Australia, Singapore, Hong Kong and Egypt.

For the first seven months of the year, the trade deficit has ballooned to $285.5 billion, compared with $229 billion during the same period of 2002. The trade deficit is expected to widen during the remainder of the year as spending by consumers and businesses picks up, Wood said.

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