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US jobless claims up after winter storms

WASHINGTON - Winter storms across key parts of the United States helped bring on a surge in new applications for jobless benefits, the government said on Thursday, while other data showed some strength in the manufacturing sector.

US jobless claims surged by a bigger-than-expected 44,000 last week to a seasonally adjusted 357,000, the Labour Department reported.

Much of that rise came from winter storms in the Midwest and Northeast that put more workers in unemployment lines, a department official said.

Economists were expecting little movement in the weekly jobless claims data.

“These data are hugely volatile and we need to see what happens over the next few weeks. If a sustained increase really is underway, everything will change,” said Ian Shepherdson, chief US economist at High Frequency Economics.

Rising claims signal slower payrolls and rising unemployment, which would greatly increase the chance of the Federal Reserve easing, Shepherdson added.

According to a separate Labour Department report, US import prices in January fell 1.2 percent on a 7.3 percent tumble in petroleum.

US government bond prices extended gains on the bigger-than-expected decline in import prices, which is a closely watched gauge of inflation pressures.

The United States reported a net overall capital outflow of $11 billion in December, down from November’s inflow of $70.5 billion, the Treasury said. The dollar fell to six-week lows against a basket of currencies on the report.

But on a positive note for the troubled manufacturing sector, activity in New York picked up in February. In addition, export prices on US capital goods rose for the fifth straight month, separate data showed.

According to the New York Federal Reserve, manufacturing activity in New York State factories jumped in February from January.

The New York Fed’s “Empire State” general factory conditions index surged to 24.35 in February from 9.13 in January, and far above the expected 10.0.

The Labour Department’s data on import and export prices showed a 0.3 percent in export prices January, boosted primarily by price gains on US capital goods, which account for 40 percent of all exports.

It was the fifth straight increase in export prices for crucial capital goods, which rose by 0.2 percent. Auto export prices rose by 0.2 percent, the 13th straight monthly rise.

Jobless claims rise

Initial jobless claims hit the highest level since November, but most economists acknowledge the weekly figures fluctuate widely and look more to the four-week average and longer trends in this data.

Even so, the four-week moving average rose by 17,500 to 326,250 last week, pointing to some weakness in the labour markets as the economy cools off this year from a robust end to 2006.

“I’m not putting faith in this jump to an absurdly high number, but the bottom line is that if you are looking at this number in and of itself, the economy has suddenly taken a turn for the weaker,” said Robert Macintosh, chief economist at Eaton Vance Management in Boston.

The number of workers continuing on unemployment benefits rose by 71,000 to a seasonally adjusted 2.560 million in the week ended Feb. 3, the most recent week these data were available. That was the highest level since January of last year.