New claims for jobless benefits up sharply but government cites technical fluke

WASHINGTON - New claims for unemployment insurance shot up last week, but the layoffs picture was distorted by federal requirements related to how laid-off workers who exhausted their benefits may seek to get them extended. <br> <br> For the work week ending March 30, new claims for jobless benefits jumped by a seasonally adjusted 64,000 to 460,000, the highest level since the beginning of December, the Labor Department reported Thursday. <br> <br> Many analysts had expected new claims to fall. <br> <br> A government analyst said that a portion -- he did not know exactly how much -- of the big rise in claims resulted from a federal provision requiring workers whose benefits had run out to file a new claim in order to become eligible for an extension of federal jobless benefits. <br> <br> Because of this requirement, the weekly claims figures -- usually a good proxy for layoffs -- could be volatile in the next few weeks. <br> <br> Congress recently passed legislation signed into law by President Bush that provided a 13-week extension of jobless benefits. <br> <br> The more stable four-week moving average of new claims, which smoothes out week-to-week fluctuations, also rose last week to 403,750, the highest level since the middle of January. <br> <br> The nation&#39;s unemployment rate dipped to 5.5 percent in February. But many economists believe the rate will rise to 5.6 percent when the government releases the employment report for March on Friday. <br> <br> Businesses had slashed thousands of jobs to cope with a recession that began in March 2001. Companies&#39; profits took a real hit during the slump, as did capital investments. <br> <br> Economists project companies will be reluctant to quickly hire back laid-off workers until profits recover and business executives are convinced that the economic recovery is here to stay. <br> <br>