
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, December 31, 1993                   TAG: 9312310072
SECTION: BUSINESS                    PAGE: A-11   EDITION: METRO 
SOURCE: 
DATELINE: WASHINGTON                                LENGTH: Short

DROP IN JOBLESS CLAIMS NUDGED BY HOLIDAY

Analysts played down last week's drop of 39,000 in initial unemployment claims, saying the decline was due to the Christmas holiday. They also shrugged off the bond market's sell-off on the news.

New claims for state unemployment insurance benefits were made by 291,000 people during the week ended Dec. 25, the Labor Department reported Thursday. That was their lowest level since Feb. 4, 1989, when they stood at 286,000.

Cynthia Latta, economist with DRI/McGraw-Hill, noted that trading volume in the bond market is thin during the holiday season, and price movements are easily exaggerated. Bond prices were down 21/32 in early trading after the news.

Analysts generally pay more attention to the four-week moving average of claims to get a more stable reading on trends. The four-week average also declined, to 321,500 from 329,250 in the week ended Dec. 18.

Paul Lally, economist with R.H. Wrightson, agreed that the claims decline was exaggerated by the Christmas holiday. He also said the bond market's movement was exaggerated by its thin volume.

But he also said he thought claims were trending down and foreshadow increasing strength in the labor market. He forecasts payroll employment growth of more than 200,000 in December. - Knight-Ridder/Tribune

by CNB