Jobless Claims Drop 13,000 in Latest Week, But Still High

June 19, 2003

WASHINGTON (Reuters) — The number of applications for initial jobless aid fell for a second consecutive week, the government said Thursday, but claims remained stubbornly high in a sluggish economy.

First-time claims for state unemployment insurance benefits, a rough guide to the pace of layoffs, fell 13,000 to 421,000 in the June 14 week from a revised 434,000 for the prior week, the Labor Department said.

New claims have held above the key 400,000 mark for 18 straight weeks, while the four-week moving average has stayed above that level for 16 weeks. Economists view the 400,000 mark as a sign of a stagnant labor industry.

Analysts were expecting 426,000 first-time claims for the week ended June 14 compared with the 430,000 originally reported in the prior week.

The fall in state claims nudged down the four-week moving average, a more reliable indication of job market health because it smooths out volatility in the weekly figures, to 432,000 from 435,000 in the prior week.

The Federal Open Market Committee, the policymaking arm of the Federal Reserve, holds a two-day meeting starting June 24 to weigh their next move on interest rates.

The Fed is widely expected to lower interest rates a notch or two at the meeting as insurance against deflation risks. A rate cut would take overnight borrowing costs from a 1961 low of 1.25% to levels not seen since 1958.

The number of people continuing to draw weekly benefits fell 62,000 to 3.72 million in the week ended June 7, the latest week for which data available.

http://www.usatoday.com/money/economy/employment/2003-06-19-jobless_x.htm