THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, October 25, 1996 TAG: 9610250546
SECTION: BUSINESS PAGE: D6 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: WASHINGTON LENGTH: 39 lines
The number of new claims for jobless benefits dropped last week by an unexpectedly high 22,000. It was the biggest decline in three months and clouded the degree to which the economy may be slowing.
Bond prices fell slightly after the report, which renewed worry that signs of economic strength could result in higher interest rates, thereby eroding the value of fixed investments. The weakness extended to stocks, which also were lower.
Applications for unemployment insurance fell to a seasonally adjusted 320,000 last week, lowest since 317,000 in the week ended Aug. 31, the Labor Department reported Thursday. The 22,000 drop was the steepest since a 27,000 plunge during the week ended July 27.
Many economists had expected little change in the claims number, citing a ripple effect in the United States of the Canadian auto workers strike against General Motors Corp. The dispute was settled earlier this week.
Some analysts said the strike-related applications were offset in part by the Columbus Day holiday, which left fewer days for laid-off workers to file for jobless benefits.
Others said the decline was a fallback from the 20,000 jump in claims the previous week, when many workers who lost their jobs several weeks earlier had waited to file because of benefit increases in the new quarter.
Economists at Merrill Lynch & Co. told their clients Thursday they expect 150,000 payroll additions in October. Although this would reverse the 40,000 job loss in September, it would be ``consistent with the downward trend in employment observed for the last few months,'' they said.
Other analysts weren't so sure.
``The most recently reported claims statistics point to further strength in the labor market,'' economists at Donaldson, Lufkin & Jenrette Securities Corp. said.
KEYWORDS: UNEMPLOYMENT RATE by CNB