Washington, March 13 (Bloomberg) -- Filings for state unemployment benefits in the U.S. held above 400,000 for a fourth straight week as companies curbed hiring in the face of economic weakening. States received 420,000 applications for jobless aid in the week ended Saturday, the Labor Department said. That followed 435,000 the prior week, the highest since mid-December. The less volatile four-week moving average of claims rose to 419,750, the highest this year. As the prospect of war with Iraq unsettled companies, consumers and financial markets, the economy stumbled last month. Payrolls fell 308,000 in February and consumer confidence fell to a nine-year low, prompting some economists to predict the Federal Reserve will soon cut its benchmark interest rate target to the lowest since Dwight D. Eisenhower was president. ``The labor market has clearly lost momentum again,'' said James O'Sullivan, an economist at UBS Warburg LLC in Stamford, Connecticut. The figures ``don't show the economy is collapsing, but it clearly shows some weakening.'' Economists had projected that jobless claims would fall to 417,000 last week from an originally reported 430,000 the week before, based on the median of 37 forecasts in a Bloomberg News survey. Some economists consider claims above 400,000 an indication of a weakening job market. The past four weeks were the longest stretch for weekly claims to exceed that figure since six weeks in August and September. Weekly claims have averaged 399,500 so far this year, compared with 405,000 last year.
Continuing Claims
The number of workers continuing to receive jobless benefits rose by 14,000 to 3.496 million in the week that ended March 1, the highest since the week ended Nov. 16 when the total was 3.61 million. The insured unemployment rate, which tends to track the U.S. jobless rate, climbed to 2.8 percent in the week ended March 1, also the highest since November, from 2.7 percent the prior week. The Labor Department said 43 states and territories reported an increase in new claims during the week that ended March 1, while 10 states and territories reported a decrease. Sustained weakness in the labor market is raising concerns that the recovery is faltering. The February decline in payrolls was the biggest since November 2001, when airlines and other companies shed jobs after the Sept. 11 attacks. Job creation is important to household incomes and consumer spending, which accounts for two-thirds of the economy.
`Economy Not Recovering'
Federal Reserve and private economists have said the lack of hiring suggests the economy may not be as strong as they once thought. The February payroll decline ``clearly points in the direction of the economy not recovering on the track that we hoped would take place,'' William Poole, president of the Federal Reserve Bank of St. Louis, said Monday. In the past month, manufacturing slowed and auto sales fell to the slowest pace since August 1998. At the same time, expectations of a conflict with Iraq have diminished business sentiment and investment. ``Millions of people who are looking for work can't find it,'' U.S. Treasury Secretary John Snow said Tuesday. ``There is some concern that we could fall off the log, that the recovery could weaken.'' Agilent Technologies Inc., a maker of computer chip and telecommunications testing gear, said it will cut 4,000 jobs, or 11 percent of its staff, after reporting its biggest quarterly loss because of falling demand. First-quarter orders fell 7.3 percent to $1.36 billion, Agilent said.
Forecasts Scaled Back
Economists have scaled back their forecasts for GDP growth this year for two straight months, the latest Blue Chip Economic Indicators survey found this week. The economy will probably expand 2.6 percent this year rather than the 2.7 percent projected last month, according to the survey's consensus of 54 economists. Gross domestic product grew 2.4 percent in 2002. The Fed's policy-setting Open Market Committee meets next week amid some predictions that it will cut its benchmark overnight bank lending rate by a quarter-point to 1 percent, the lowest since July 1958. Economists at Merrill Lynch & Co., J.P. Morgan Chase and HSBC Securities, three of the 22 primary bond dealers that trade directly with the central bank, forecast a rate cut next week. //www.quote.bloomberg.com