Fewer Americans Filed Jobless Insurance Claims in Past Month
Fewer Americans filed claims for unemployment insurance payments over the past month, showing the job market is beginning to improve.
The number of applications for jobless benefits averaged 431,000 a week over the month ended Nov. 27, the lowest level since August 2008, Labor Department figures showed today in Washington. Claims increased by 26,000 last week, more than forecast, to 436,000, after reaching a two-year low.
“Lower lows and lower highs define a downward trend, and that’s what seems finally to be emerging,” Ian Shepherdson, chief U.S. economist at High Frequency Economics LLC in Valhalla, New York, said in a note to clients. “If it continues, we should expect to see better payroll numbers over the next few months.”
After slowing the pace of firings in November, companies may be on the cusp of ramping up the hiring necessary to further boost consumer spending, which accounts for 70 percent of the economy. A Labor Department report tomorrow may show employers added 145,000 workers last month and the unemployment rate held at 9.6 percent.
The median projection of 47 economists surveyed by Bloomberg News called for 424,000 filings after claims dropped the prior week to the lowest level since July 2008. Jobless benefits applications were projected to climb from 407,000 initially reported for the prior week. Estimates ranged from 395,000 to 470,000.
Stocks rose as sales topped estimates at retailers from Abercrombie & Fitch Co. to Limited Brands Inc., while European policy makers extended an emergency loan program. The Standard & Poor’s 500 Index rose 0.5 percent to 1,211.54 at 9:47 a.m. in New York. The 10-year Treasury note fell, pushing up the yield to 2.99 percent from 2.97 percent late yesterday.
The four-week moving average of jobless claims fell from 436,750 in the previous week, today’s report showed.
The number of people continuing to receive jobless benefits rose by 53,000 in the week ended Nov. 20 to 4.27 million. They were forecast to climb to 4.2 million.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 235,000 to 4.9 million in the week ended Nov. 13.
Thousands of Americans are set to begin losing unemployment benefits after Congress failed to agree on extending aid to the long-term unemployed. About 8,400 people will see their jobless payments cut off by the end of this week, according to the Labor Department. Before the last week of the year, aid to 1.36 million will be interrupted, the agency said.
The lapse in benefits for those Americans will not affect overall weekly jobless claims or continuing claims, Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said this week in a research note. Instead, the interruption for those receiving benefits could lower household income and purchases this month, he said.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.4 percent in the week ended Nov. 20, today’s figures showed.
Forty-eight states and territories reported an increase in claims, while five reported a decrease. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates. That relationship has broken down in recent months as some companies cut staff and others expand -- pointing to an uneven recovery.
In an effort to reach out to some of the nation’s largest employers, President Barack Obama met with Wal-Mart Stores Inc. Chief Executive Officer Mike Duke at the White House on Nov. 29. The meeting is one of a series of sessions aimed at soliciting the views of companies, with the goal of spurring the recovery and adding jobs.
Some companies are boosting payrolls. Citigroup Inc., which claims 2,500 of the world’s 3,000 largest corporations as clients, said last month that it plans to hire about 200 bankers by the end of 2011 to court businesses with less than $20 million of annual sales.
Other companies are cutting jobs. Lockheed Martin Corp., the world’s largest defense company, said last month it will cut at least 400 workers through a plant closure. The changes will save the company $150 million over the next 10 years, the company said in a Nov. 18 statement.
To contact the editor responsible for this story: Christopher Wellisz at email@example.com