Jobless Claims Up Sharply as Bad Weather Forces Layoffs

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The number of people applying for unemployment benefits rose sharply last week, but the figures were largely distorted by rare snowstorms that swept through the Southeast.

Applications surged last week by a seasonally adjusted 51,000 to 454,000, the highest level since late October, the Labor Department said Thursday.

A government analyst said that a major reason for the spike was the harsh weather in Alabama, Georgia, North Carolina and South Carolina. That forced many companies to shut down temporarily and also prevented many people from applying for benefits in the previous week.

When state offices, which had closed, reopened and people were able to file applications that pushed the number of requests up sharply, the analyst said.

The four southern states reported a large increases in the number of requests for unemployment benefits. Trucking companies, delivery firms, construction companies and others were affected.

Applications had been declining steadily for several weeks. Requests for unemployment benefits fell sharply in the previous week to 403,000.

Many economists consider data in January less reliable because of seasonal fluctuations.

Applications below 425,000 tend to signal modest job growth. But they would need to dip consistently to 375,000 or below to indicate a significant decline in the unemployment rate.

The four-week average, a less volatile measure, also rose last week by 15,750 to 428,750.

The average had hit a two-year low of 411,250 on Jan. 1. That had suggested companies - operating with lean work forces - may need to add more workers as the economy gains momentum.

Even with last week's increase, economists are optimistic that layoffs will slow and that hiring will pick up this year.

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