The number of newly laid-off workers seeking jobless benefits rose last week, though the government said its report again was distorted by the timing of auto plant shutdowns. Unemployment insurance claims have declined steadily since the spring, but most private economists and the Federal Reserve expect jobs to remain scarce and the unemployment rate to top 10% by year-end.
The Labor Department says its tally of initial claims for unemployment insurance rose by 30,000 to a seasonally adjusted 554,000. That was above analysts’ estimates of 550,000. The increase follows two straight weeks of sharp drops, largely because automakers didn’t lay off as many workers as expected in early July. General Motors and Chrysler temporarily shut down many of their plants earlier than usual this year, in May and June, after filing for bankruptcy protection and restructuring their companies.
A department analyst says the government’s seasonal adjustment process expected claims to drop sharply last week, after the normal pattern of auto layoffs was complete. But that didn’t happen, causing seasonally adjusted claims to rise.
Weekly claims remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007. The lowest level this year was 488,000 for the week ended Jan. 3.
