Refilings Swell Jobless Claims

Unemployment claims surged to a four-month high in the latest week, confounding economists' expectations for a decline, as workers who had exhausted their current benefits filed for extensions.

First-time requests for state unemployment benefits unexpectedly rose 64,000, to 460,000 in the week ended Saturday, according to the Labor Department. This was the highest level since the week of Dec. 1 and well above economists' estimate of 380,000.

The four-week moving average, which is considered a more reliable gauge because it smoothes out weekly fluctuations, stood at 403,750 -- the highest level since mid-January.

The surprising increase was due in part to re-applications for extended benefits, according to government sources. President Bush recently signed legislation that allows workers to receive funds for another 13 weeks once their current benefits have expired.

"This renders the data even harder to interpret and we think it makes an even stronger case for ignoring them," said Ian Shepherdsen, chief economist at High Frequency Economics. "The Challenger survey suggests the 'true' level of claims is about 350,000."

Shepherdsen said seasonal factors such as the Easter holiday also make the data unreliable.

The number of workers continuing to collect unemployment benefits rose during the week ending March 23 to 3.61 million from 3.51 million the prior week.