Jobless benefit claims fall again
WASHINGTON (AP) - January 10, 2008 The Labor Department reported that 322,000 persons filed
applications for jobless benefits, down by 15,000 from the previous
week when claims had declined by 20,000.
While the second straight drop in weekly claims caught analysts
by surprise, it was not seen as a sign of a fundamental improvement
in the labor market, which has been coming under strains that have
raised concerns about a possible recession.
Labor Department analysts said the declines of the past two
weeks were more the result of difficulties in adjusting the numbers
around the Christmas and New Year's holidays when state claims
offices are open fewer days.
The four-week average for jobless claims dipped slightly to
341,000, the lowest in a month.
Meanwhile, many of the nation's big chain retail stores reported
Thursday that the holiday shopping season turned out to be even
weaker than expected, raising more worries about consumer spending
in the months ahead.
Particularly hard hit were clothing sellers including Limited
Brands Inc. However, the nation's biggest retailer, Wal-Mart Stores
Inc., exceeded Wall Street expectations.
Last Friday, the government reported that the unemployment rate
surged to 5 percent in December, up from 4.7 percent in November.
That represented the biggest one-month gain in the jobless rate
since October 2001 when unemployment spiked as the result of
disruptions caused by the Sept. 11 terror attacks.
Many private economists believe the risks of an outright
recesion have risen to 50-50. President Bush is examing a variety
of proposals that could be part of an economic stimulus package
aimed at averting a downturn - or at least softening it.
Bush has said that he will announce his decisions around the
time of his Jan. 28 State of the Union address. If Bush opts for a
stimulus package, it is expected to contain temporary tax cuts for
individuals and businesses.
The bad December unemployment and a string of other data
pointing to economic weakness have raised the odds that the Federal
Reserve will cut interest rates for a fourth time when they meet at
the end of this month.
The central bank is trying to combat the adverse effects of a
steep slump in housing and a credit crisis that has roiled
financial markets since August.
Many economists believe that the overall economy, which grew at
a solid annual rate of 4.9 percent in the July-September quarter,
skidded to an anemic growth rate of 1 percent or less in the final
three months of this year and may weaken further in the current
three months.