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U.S. Initial Jobless Claims Rose Last Week to 322,000
Courtney Schlisserman in Washington


Dec. 29 (Bloomberg) -- The number of Americans filing first-time claims for unemployment benefits rose last week, remaining below the average for 2005 and suggesting the labor market is still growing, a government report showed.

Initial jobless claims increased by 3,000 to 322,000 last week, the Labor Department said today in Washington. The four- week moving average, a less volatile measure, rose to 325,000 from 324,750. The average this year was 332,000.

Companies may add employees this year at the second-fastest rate since 2000, bolstering consumer confidence and fueling spending. The number of people on unemployment benefit rolls has declined since the end of September, suggesting Americans are having more success in finding jobs.

``Income growth, at least from wages and salaries, is likely to be robust and that in turn is the principle driver of consumer spending,' said Richard DeKaser, chief economist at National City Corp. in Cleveland. Claims are ``consistent with monthly payroll gains of around 200,000' a month, he said.

A report yesterday from the Conference Board showed consumers' attitudes about the labor market are brighter. The percentage of people saying jobs are hard to get fell to 22.2 percent and those saying jobs are plentiful rose to 23.3 percent.

Claims were expected to rise to 320,000 from a previously reported 318,000 in the week ended Dec. 16, according to the median forecast in a Bloomberg News survey of 25 economists. Estimates ranged from 308,000 to 325,000.

The benchmark 10-year Treasury note fell 1/32 point, pushing its yield down 1 basis point to 4.37 percent at 9:30 a.m. in New York.

Hurricanes

Continuing claims rose to 2.715 million in the week that ended Dec. 17, from 2.630 million the week before. The number was 2.87 million in the week ended Sept. 24.

The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, held at 2.1 percent in the week ended Dec. 17, the Labor Department said today. Thirty-six states and territories had a decrease in filings, while 16 reported an increase that week.

The rate has fallen since the middle of September, suggesting people thrown out of work by Hurricanes Katrina, Rita and Wilma are finding employment. Through Dec. 17, a total of 603,600 people filed jobless claims as a result of the hurricanes.

An average of 324,000 people a week filed claims for unemployment benefits through August, before Katrina struck. Weekly claims averaged 389,000 in September, 351,000 in October and 323,000 in November.

`Healthy Pace'

The U.S. economy added 215,000 jobs in November, the most since July, and probably another 200,000 this month, according to a Bloomberg News survey. So far this year, companies have added 1.84 million jobs. The U.S. created 2.194 million in 2004, which was the most since 1999, according to Labor Department statistics.

Employment is expanding at a ``healthy pace' Federal Reserve Bank of Richmond President Jeffrey Lacker told the Charlotte Chamber of Commerce in North Carolina on Dec. 21. The gap in labor market growth because of the hurricanes should be ``made up in the next several months as reconstruction gets underway,' he said.

An unemployment rate of 5 percent is ``consistent with a reasonably full utilization of resources right now,' Lacker said.

The Fed has been watching labor market statistics for any signs that tightening resources are leading to wage inflation. Policy makers on Dec. 13 raised the overnight lending rate a quarter point for a 13th straight time, to 4.25 percent.

Railroads

``Possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures,' the Fed said in a statement accompanying its rate announcement.

Norfolk Southern Corp., the fourth-largest U.S. railroad, plans to continue to add workers at a ``fairly robust' pace, chief executive officer Charles Moorman said in an interview on Dec. 12. The company hired 2,400 people this year and needs the workers because it's running more trains to keep pace with a 4.4 percent rise in shipments so far this year.

http://www.bloomberg.com/apps/news?pid=10000103&sid=ayvvvzLim6qA