Jobless Claims Leap Unexpectedly

August 29, 2002 ( - American jobless claims rose for the third week in a row - and cracked the key 400,000 level for the first time in nearly two months, according to the Labor Department.

Not only did the DoL’s figures for the week ending August 24 show an 8,000-claim increase to 403,000, the totals represented the first time since early July that the jobless measure broke the closely-watched 400,000 level.  Economists typically consider the 400,000 claims level a tipoff of a recession.

The DoL said part of the reason for the jobless uptick was a continuation of auto industry layoffs, but some viewed the reading as evidence that the economy has not yet shaken off the effects of the recession.
DoL’s jobless report proved an unpleasant surprise for economists participating in a Reuters poll who had been looking for a slight decrease of 2,000 from the 389,000 originally reported for the prior week.

The DoL said the four-week moving average – also closely watched because it tends to smooth out short-term fluctuations – was 392,750, up 3,000.

The latest jobless claims rise, which sparked a gain in Treasury bond prices, is likely to spark concerns about the health of the labor market.