Oct 25, 2002 By Leigh Strope Ap Labor Writer 3 min read

WASHINGTON (AP) – New claims for jobless benefits fell last week after rising the week before, providing a mixed picture of the job market for workers and employers as the nation’s economy continues to struggle toward recovery. For the week ending Oct. 19, new applications for unemployment insurance dropped by a seasonally adjusted 25,000 to 389,000, the lowest point since Oct. 5, the Labor Department reported Thursday.

The week before, claims rose by a revised 25,000 to 409,500. Labor analysts said seasonal factors, including the recent Columbus Day holiday, probably accounts for some of the drop.

The effects of the uneven economic recovery could be seen vividly in the report, which has bounced up and down in the number of people seeking benefits the entire year. For months now, claims have hovered around the 400,000 mark, a level associated with a sluggish labor market.

The moving average, which smoothes out those week-to-week fluctuations, fell by 5,500 last week to 404,000.

That was the lowest level since Aug. 31.

Because profits took a hit during last year’s recession and are still hurting, some companies have been reluctant to make big commitments in hiring and capital spending, factors restraining the recovery.

At corporate boardrooms, economic uncertainties, including a possible war with Iraq and the West Coast dock workers labor dispute, complicate the business climate, economists say.

Thursday’s report also showed that the number of unemployed people continuing to collect jobless benefits declined to a seasonally adjusted 3.57 million for the work week ending Oct. 12, the most recent period for which the information is available. The level suggests that businesses are not vigorously hiring.

The report also showed that 40 states and territories reported an increase in initial jobless claims for the week ending Oct. 12, while 12 reported a drop and one had no change.

The Federal Reserve in a report Wednesday painted a somber picture of weak retail sales, tough times in manufacturing and a lackluster job market. Many analysts said the report increased the chances the Federal Reserve will cut interest rates at the next meeting Nov. 6.

Federal Reserve Chairman Alan Greenspan did not tip his hand on interest rates during a speech Wednesday to a conference on productivity, although he did predict that the resurgence in productivity growth that the country has enjoyed since the mid-1990s should continue for a while longer.

But he cautioned that the boost productivity receives from a wave of new technology has eventually waned in the past. Greenspan made no comments about current economic conditions.