A Bad US Job Market Gets Worse

September 11, 2003 (PLANSPONSOR.com) - An already bad jobless picture got even worse last week as the queue for filing initial unemployment benefit claims was the longest its been since the summer.

The US Department of Labor (DoL) said the jobless claims for the week ending September 6 bumped up 3,000 to 422,000 from the previous week’s revised figure of 419,000 (See  Fragile Recovery Expectations Shattered By Jobless Claims Jump – the highest level since early July.

The widely watched four-week moving average – which irons out short-term volatility – also headed north last week by 4,500 to 407,250, from the previous week’s revised average of 402,750. The fact that the claims total and the average are both above the 400,000 mark is seen as particularly foreboding since economists consider it as the dividing line between a healthy job market and a slumbering one.

Finally, in a sign that it is still tough to find work, the number of people being forced to cling to the jobless rolls jumped by 61,000 for the week ending August 30 to 3.67 million, up from the earlier week’s 3.61 million.

Thursday’s bad news followed a report last week showing employers slashed 93,000 workers from their payrolls in August – surprising economists, who thought an unusually long period of labor market weakness was finally drawing to a close (See  DoL: Market Hemorrhaged Jobs in August). August’s hemorrhaging brought the job-loss toll since the economy fell into recession in early 2001 to 2.8 million, including 1.1 million since the recession ended 21 months ago.

Wall Street economists participating in Reuters’ weekly survey were, once again, off the mark. They called for a drop to 400,000 claims for the  September 6 week from the originally reported 413,000.