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Published on: 04/09/04
WASHINGTON -- The number of people filing new claims for unemployment
benefits dropped last week to the lowest level in more than three years,
a promising sign that companies feel better about the economy's prospects
and are less inclined to get rid of workers.
The Labor Department reported Thursday that new applications filed
for jobless claims declined by a seasonally adjusted 14,000 to 328,000
for the week ending April 3. That marked the lowest level since Jan.
13, 2001 — the week before President Bush's inauguration.
In other economic news, consumers, lured by spring fashions, were in
the buying mood in March, another good sign for the economy.
Wal-Mart, Costco, Limited Brands, J.C. Penney and Nordstrom all reported
results that topped Wall Street forecasts. The results cut across industry
sectors, even helping some of the long-struggling department store chains.
Federated Department Stores, owner of the Atlanta-based Rich's-Macy's
unit, saw same-store sales rise 6.8 percent.
It was the fourth straight month of solid gains for retail chains, although
comparisons were buoyed because sales during March 2003 were suppressed
amid concern about the Iraq war.
Consumer spending accounts for roughly two-thirds of all economic activity
in the United States.
On the layoffs front, the jobless claims figures were better than economists
expected. They had called for a slight decline to around 340,000.
The more stable four-week moving average of claims, which smooths out
weekly fluctuations, also went down last week by 3,250 to 336,750. That
represented the lowest level since Nov. 25, 2000.
The latest snapshot of layoffs raised hopes that recent improvements
seen in the labor market might be sustained. A complete turnaround in
the jobs market is the one missing piece of the economic recovery puzzle,
analysts say.
"I think executives' mind-sets are changing," said Clifford
Waldman, economist at Manufacturers Alliance/MAPI, a research group.
"They went from 'I don't know whether this recovery will stick
around so I need to keep a lid on costs' to 'This recovery has the potential
to be strong so I better get my work force in place to meet it.' That's
essentially the mentality change."
The employment situation showed signs of turning an important corner
in March. The economy added 308,000 jobs last month — the most
in four years. While that's definitely an improvement from payroll gains
registered in previous months, economists want to see net job gains
in the range of 200,000 to 300,000 a month on a consistent basis before
they declare a recovery in the jobs market.
The nation's unemployment rate, meanwhile, edged up to 5.7 percent in
March as an improved economic climate beckoned more job-seekers to look
for work again.
Even with the big job gains in March, the economy has lost a net 1.84
million jobs since January 2001, the month Bush took office.
That's something presumptive Democratic presidential nominee John Kerry
says is evidence that Bush's economic policies aren't working. Bush,
however, says the robust employment gain in March shows his economic
policies are making the economy stronger and translating into job growth.
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