The number of new people signing up for jobless benefits shot up last week, highlighting the sometimes uneven nature of the recovery taking place in the labor market.
The Labor Department reported Thursday that new applications filed for unemployment insurance jumped by a seasonally adjusted 43,000 to 364,000, the highest level since late September. The over-the-week increase of 43,000 was the most since the end of March 2002.
The latest snapshot of the labor market activity surprised economists. They were forecasting claims to rise last week to around 331,000.
However, in a more positive note, the number of claims that had been filed in the prior week turned out to have fallen by 10,000, according to revised figures. That drop was twice as big as initially reported.
The more stable, four-week moving average of claims, which smooths out week-to-week fluctuations, rose last week by a smaller 750 to 333,000.
Labor Department analysts cautioned that jobless claims figures around the holidays tend to be volatile, meaning that they can swing widely from week to week. In these cases, the four-week moving average is sometimes a better barometer of labor market activity, they said.
Strengthening job creation has been an important task for President Bush. The still-recovering job market has been seized upon by Democrats who contend the president’s economic policies have failed to induce a steady hiring spree by businesses.
Employers added 112,000 jobs in November, down from 303,000 in October. Economists, however, are hoping for a pickup in December’s payrolls and are forecasting the addition of around 175,000 jobs during the month. The jobless rate is expected to hold steady at 5.4 percent. The employment report for December will be released by the government on Friday.
Looking ahead, the Bush administration predicts the economy will create an additional 2.1 million jobs in 2005 — a figure private economists called respectable. Still, that’s a much lower estimate than a previous forecast that 3.6 million jobs would be created next year.
The Federal Reserve, encouraged by the economy’s performance, boosted short-term interest rates for a fifth time this year on Dec. 14. Fed policy-makers at that meeting said “labor market conditions continue to improve gradually.”
The number of people continuing to collect jobless benefits, meanwhile, rose by 61,000 to 2.84 million for the week ending Dec. 25, the most recent period for which that information is available. However, compared to last year, there’s been improvement. A year ago, the figure stood at 3.30 million.