The number of Americans filing first-time claims for unemployment benefits fell last week, staying close to a three-year low, the Labor Department said Thursday.
Separately, it said workers’ wages and benefits grew by 0.7 percent in the final quarter of 2003, the smallest quarterly increase in a year, as companies still uncertain about the economic recovery kept a close eye on their bottom lines.
Initial claims for unemployment benefits dipped by a seasonally adjusted 1,000, to 342,000, the lowest level since the end of December, a sign that the pace of layoffs is stabilizing.
“People who do have jobs should feel a little more secure because the major housecleaning appears to be finished,” said Clifford Waldman, economist at the Manufacturers Alliance/MAPI, a research group.
The number of people continuing to collect state jobless benefits in the week ended Jan. 17 rose by 11,000, to 3.13 million.
A study released Thursday by the Center on Budget and Policy Priorities said nearly 2 million people are expected to exhaust their unemployment benefits in the first half of the year without access to more government aid. The study was based on Labor Department data of jobless workers who began receiving unemployment benefits in the last half of 2003.
“In no other January-June period on record have so many unemployed workers exhausted their regular benefits without qualifying for additional weeks of unemployment assistance,” said the study by the Washington-based advocacy group.
Congress has refused to approve another extension of federal unemployment benefits for people who exhaust their state aid.
“Claims are falling but jobs aren’t being created,” said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York.
The economy has added 278,000 jobs in the last five months, government statistics show. More than 250,000 jobs would have to be added each month through September to make up for the more than 2 million jobs lost in the last three years.
In its second report, the Labor Department said benefits rose 1.2 percent from October through December, while wages and salaries edged up 0.5 percent.
“Let’s face it: [the] Goal No. 1 at most firms right now is keeping a lid on costs, and benefits have been rising,” said Doug Porter, a senior economist at BMO Nesbitt Burns in Toronto. “So I think that’s been an important factor in keeping companies from hiring more.”
Benefit costs, which include severance, health insurance, vacation pay and referral bonuses, jumped 6.3 percent in 2003, the biggest increase since 1990. Wages and salaries rose 2.9 percent.
