WASHINGTON — WASHINGTON -- A large fall in the number of new people registering state unemployment claims does not reflect a sudden increase in jobs growth, but rather points to unreliability of the data, analysts said yesterday.
Claims were made by 366,000 people, down 47,000 in the week ended Feb. 5, according to seasonally adjusted Labor Department data, reversing a 50,000-person surge the previous week.
Georgia, New Mexico, Virginia, Florida, Illinois, North Carolina, Tennessee and Pennsylvania reported that jobless claims rose that week due to layoffs.
California reported initial claims grew 17,015 due to the Los Angeles earthquake and the return to a five-day workweek after the Martin Luther King Jr. holiday.
"This week is a payback to the sharp swings the previous week,"said Michael Moran, chief economist with Daiwa Securities. "The claims figures are usually a volatile series," but now they are even more volatile, he said.
He noted that although the trend as shown by the four-week average shows a higher level of jobless claims than at the end of 1993, it was too early to say if this pointed to a deceleration in hiring in the first quarter.
In the four weeks ended Feb. 5, claims averaged 377,250, compared with 327,000 in the four-week period ended Jan. 1.
"My guess is they were down so much for the reason they were up so much the week before," Robert Dieli, economist at The Northern Trust in Chicago, said of the tumble in the latest week. He noted that claims dropped the previous week due to the aftermath of the Los Angeles earthquake. Mr. Dieli predicted that claims would surge in the next weekly report because of the continuing effects of the earthquake and the cold weather felt in much of the country.
"These huge changes are almost always calendar driven because ofholidays or driven by special events," such as natural disasters, he said.
Kathleen Stephansen, money market economist with Donaldson, Lufkin & Jenrette, said that the Labor Department has announced it has been experiencing difficulties with the seasonal factors it uses to iron out changes that happen at the same time every year. "So the volatility is not all that surprising," she said. "All this leads me to believe it is very difficult to conclude anything about the health of the labor market based on the claims."