Ashtead (AHT) - The recovery continues

U.S. Economy: Jobless Claims Fell to Three-Year Low (Update2)
Dec. 31 (Bloomberg) -- The number of Americans filing first- time applications for state unemployment benefits declined to 339,000 last week, the lowest in almost three years.

Initial jobless claims fell by 15,000 in the week that ended Saturday from 354,000 a week earlier, the Labor Department said in Washington. Last week's filings were the fewest since the week ended Jan. 20, 2001, when President George W. Bush took office.

America West Airlines and Cypress Semiconductor Corp. are among companies planning to hire in 2004 as demand improves. The U.S. economy, the world's largest, is forecast to grow 4.4 percent next year, the best performance since 1999, according to the latest Bloomberg News survey.

``Claims are ratcheting down week by week and if it keeps up like this, you could say that a sustainable recovery in the labor market is here,'' said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York. ``This bodes well for job gains in 2004.''

Economists are predicting the economy probably added jobs in December for a fifth straight month, the first time that's happened since 2000, according to a Bloomberg News survey that showed a median estimate of 150,000. The Labor Department will release those statistics Jan. 9.

The gains in employment may help Bush deflect Democratic criticism of his economic policies ahead of next year's election as the country emerges from a ``job-loss'' recovery. Since Bush took office, the economy has lost 2.3 million jobs.

`Turning Around'

Factory employment may be slower to recover than other industries, Rupkey said, because ``there's tremendous competition right now'' among global manufacturers and productivity is high. Economists in the Bloomberg survey forecast no change in December factory jobs after declines in every month since July 2000.

``Things are turning around,'' said Jure Sola, chief executive officer of Sanmina-SCI Corp., in a televised interview with Bloomberg News aired today. Sola said customers of the world's third-largest maker of electronics ``are a lot more confident today than they were a year ago.''

Claims were forecast to fall to 350,000, according to the median estimate in a Bloomberg News survey of 22 economists, from the 353,000 initially reported for the week earlier. Forecasts ranged from 340,000 to 360,000.

The four-week moving average of claims, a less-volatile indicator, fell to 355,750 from 362,250.

The number of people continuing to collect state jobless benefits rose to 3.315 million in the week that ended Dec. 20 from 3.234 million a week earlier. The four-week average of continuing claims dropped to 3.293 million, the lowest since the week ended Sept. 22, 2001.

Help-Wanted Advertising

The insured employment rate, which tends to track the U.S. jobless rate, held at 2.6 percent in the week ended Dec. 20. The Labor Department also said 26 states and territories reported an increase in new claims, while the same number reported a drop. These data are reported with a one-week lag.

An index measuring the volume of help-wanted advertising in 51 major U.S. newspapers climbed in November for the first time since June, a report from the Conference Board this week showed.

``The labor market is finally sparking to life,'' said Ken Goldstein, a Conference Board economist, in a report.

Monster Worldwide Inc., the largest online job Web site, expects a 20 percent to 25 percent increase in job listings in 2004, partly because of an increase in information technology postings, Chief Executive Officer Andrew McKelvey said in a televised interview with Bloomberg News last week.

``Job listings are coming back,'' said McKelvey. Information technology listings have recently ranged between 20,000 and 25,000 compared with a low of 10,000 in the past few years, he said. Those listings had been as high as 150,000 before the recession, he said.

Outlook

The economy added jobs for a fourth month in November and the unemployment rate dropped to an eight-month low of 5.9 percent, the Labor Department said earlier this month.

Consumers are more optimistic this month about the outlook for employment than they are about the current job market. Consumer confidence last month slipped from a 14-month high as more Americans said jobs are hard to find, a report from the New York-based Conference Board today showed. Still, 21.7 percent said they expected more jobs would become available in the next six months, the most since April 2002.

``There is clearly a belief that the job market will turn around soon,'' said Rick Cobb, executive vice president of Challenger, Gray & Christmas, an outplacement firm. In its telephone survey of 1,200 people, 50 percent said they expected to have a job within three months and 92 percent said they would probably have one by June.

Next Year

The economy is projected to grow at a 4 percent annual pace this quarter following an 8.2 percent rate from July through September that was the strongest in almost 20 years, according to the median estimate of economists surveyed earlier this month by Bloomberg News. It's forecast to grow 4.4 percent in 2004, the most since it expanded 4.5 percent in 1999, according to the survey.

America West, a unit of America West Holdings Corp., announced last week it plans to hire more than 1,000 and lease four additional planes as part of a plan to boost the number of passengers it carries by 10 percent next year. The additions would boost its payroll by at least 7.7 percent.

T.J. Rodgers, chief executive of Cypress Semiconductor, said last week the company intends to expand payrolls by 15 percent over the next two years. The plans are ``quite modest,'' said Rodgers in a televised interview with Bloomberg News.

Cypress, based in San Jose, California, which makes chips for mobile phones, video game consoles and consumer products such as digital cameras, said the number of cellular phone sales this quarter has risen to about 185 million from an average of 110 million to 120 million.

Last Updated: December 31, 2003 15:46 EST