Jobless Claims Jump But...

New claims for unemployment insurance shot up last week, but the employment picture may have been distorted by a requirement to file a new application for a federal program that extends unemployment benefits for another 13 weeks.

For the work week ending March 30, new claims for jobless benefits jumped by a seasonally adjusted 64,000 to 460,000, the highest level since the beginning of December, the Labor Department reported Thursday.

First-time jobless claims - a guide to the job market and the pace of layoffs - soared to 460,000 in the week ended March 30, the highest figure for any week in about four months. In the previous week, initial claims totaled a revised 396,000.

Private economists polled by Reuters had expected claims to fall to 376,000 in the March 30 week. Labor had originally reported claims at 394,000 for the March 23 week

A government analyst said that a portion of the big rise in claims resulted from a federal provision requiring workers whose benefits had run out to file a new claim in order to become eligible for an extension of federal jobless benefits.

Because of this requirement, the weekly claims figures could be volatile in the next few weeks.

Congress recently passed legislation signed into law by President Bush that provided a 13-week extension of jobless benefits.

The more stable four-week moving average of new claims, which smoothes out week-to-week fluctuations, also rose last week to 403,750, the highest level since the middle of January.

The nation's unemployment rate dipped to 5.5 percent in February. But many economists believe the rate will rise to 5.6 percent when the government releases the employment report for March.

Businesses had slashed thousands of jobs to cope with a recession that began in March 2001. Companies' profits took a real hit during the slump, as did capital investments.

Economists project companies will be reluctant to quickly hire back laid-off workers until profits recover and business executives are convinced that the economic recovery is here to stay.