WASHINGTON – More Americans signed up for state unemployment benefits last week, the government said Thursday in a report that showed lingering labor market weakness that was exacerbated by severe winter weather.
The Labor Department said initial jobless claims rose by 12,000 to a seasonally adjusted 430,000 for the week ended March 1, the highest level since last December. The department said some of the rise was due to an increase in claims from workers impacted by winter storms that struck the U.S. East Coast in recent weeks.
The four-week moving average, considered a better measure of labor conditions because it irons out weekly fluctuations, rose to 408,750 from 400,000. That was also the highest level since December.
Last week's rise in jobless claims was bigger than expected. Economists in a Reuters poll forecast, on average, that initial claims would edge down to 404,000, but still remain above the key 400,000 mark, which is considered a sign of a weak labor market.
"The claims numbers are just another sign that February was hit by an economic blizzard and we expect to see something similar in the payrolls report tomorrow," said Avery Shenfeld, senior economist at CIBC World Markets.
Last week's increase in jobless claims will only add to economists' expectations of a weak labor performance showing in February. On Friday the government is scheduled to release that monthly data and economists polled by Reuters forecast a scant 8,000 increase in jobs outside of the farm sector. The unemployment rate is expected to rise to 5.9 percent from 5.7 percent.
"Part of it is weather related and part of it is the economy. It seems that just as business spending is showing some signs of life, consumers appear to be running out of gas," Shenfeld said.
The dollar softened slightly after the release of the jobless claims and separate data regarding U.S. non-farm productivity.
U.S. Treasury bonds did a little better on the news, but were still a bit lower from Wednesday's close.
"The market was a little bit better bid off the rise in jobless claims," said Dominic Konstam, head of interest-rate strategy at Credit Suisse First Boston. "It confirmed the general softer undertone in the data that we've been getting."