Weekly Jobless Claims Unexpectedly Jump To 3-Month High

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In another disappointing sign for the beleaguered labor market, the Labor Department released a report Thursday morning showing another unexpected increase in first-time claims for unemployment benefits in the week ended February 20th.

The report showed that initial jobless claims rose to 496,000 from the previous week's revised figure of 474,000. Economists had been expecting jobless claims to slip to 460,000 from the 473,000 originally reported for the previous week.

With the increase, which marked the second consecutive unexpected jump in claims, jobless claims rose to their highest level since coming at 501,000 in the week ended November 14, 2009.

However, Peter Boockvar, equity strategist for Miller Tabak, noted, "The snow storms were a definite influence on the reported data likely due to the administrative backlogs that got created, thus don't read too much into the data."

"With this said, the trend in initial claims is still too high and while the pace of firings still has slowed dramatically, companies still remain very reluctant to aggressively add workers on a permanent basis," he added.

The Labor Department said that the less volatile four-week moving average edged up to 473,750 from the previous week's revised average of 467,750. In the previous week, the four-week moving average was at its lowest level in over a year.

Continuing claims, a reading on the number of people receiving ongoing unemployment help, rose to 4.617 million in the week ended February 13th from the preceding week's revised level of 4.611 million.

At the same time, the report also showed that those receiving emergency unemployment compensation fell by about 318,000 in the week ended February 6th to 5.48 million. Those receiving extended benefits also edged down by 2,405 in the week ended February 6th to 203,612.

While James Knightley, an economist at ING Financial Markets, noted that the unexpected increase in weekly jobless claims could be weather related, he said, "Either way, it is not encouraging for next Friday's labor report, with a 90,000 decline in payrolls our early estimate."

Next Friday, the Labor Department is due to release its closely watched employment report for the month of February. On average, economists expect the report to show that non-farm payrolls fell by about 20,000, while the unemployment rate is expected to tick back up to 9.8 percent.

In another disappointing sign for the beleaguered labor market, the Labor Department released a report Thursday morning showing another unexpected increase in first-time claims for unemployment benefits in the week ended February 20th. The report showed that initial jobless claims rose to 496,000 from the previous week's revised figure of 474,000. Economists had been expecting jobless claims to slip to 460,000 from the 473,000 originally reported for the previous week. (Market News Provided by RTTNews)