Forex

14:19 03/12 (CEP News) Washington – Following an unexpected drop in last week's number of initial jobless claims, economists are calling for claims numbers to bump back upwards above 350,000 for the week ending March 8.

Analysts are looking for first-time claim of unemployment benefits to total 355,000, up slightly from last week's reading of 351,000. Last week's figure came in 24,000 below the prior week's numbers, accounted for partly by "friendly seasonal" factors, said Ian Shepherdson, chief U.S. economist with High Frequency Economics.

Still, economists stress that some volatility is to be expected from the weekly indicator, but point out that the trend is still on an upward trajectory.

Weakness in labour markets persists, economists said. This is partly evidenced by rising numbers of those continuing to claim unemployment benefits for an extended period of time. Continuing claims are expected to ring in at 2,830,000 for the prior week, down slightly from the previous report's reading of 2,831,000.

Another recent indicator which point to rising claims for unemployment insurance is last week's release by the U.S. Labor Department of its February nonfarm payrolls, which reported a loss of 63,000 jobs. BMO Capital Markets economist Sal Guatieri said this probably foreshadows greater claims numbers going forward.

"We see continued weakness in construction and growing signs of stress in the broader economy," Guatieri said. "And with last week's employment report, we see now that not only have companies have stopped hiring, but that they have begun to lay off workers as well."

Because of the general upward trend, TD Securities senior strategist Eric Lascelles said he wouldn't be surprised to see this week's initial claims figures tick higher again, which is more or less how the indicator has behaved since August 2007.

"We did have a bit of a breather in the last week or so, but these numbers are still consistent with the idea that the U.S. is now shedding jobs," Lascelles said.

While the current trend is still some distance from initial claims figures of 2002 and 2003, which trended in the 400,000 range, Lascelles said he also wouldn't be shocked to see current figures get there too eventually.

All sectors of employment are now being affected, though job weakness in the construction sector still leads the way due to the ongoing housing correction.

"While you do have those sectors that are suffering the most, it's pretty broadly based," Lascelles said. "There's not a lot of optimism out there, period.