Jobless Claims Fall in Sign U.S. Job Market Mending: Economy
Fewer Americans filed applications for unemployment benefits last week, a sign the labor market may keep improving after hiring picked up in July.
Jobless claims unexpectedly dropped by 6,000 to 361,000 in the week ended Aug. 4, Labor Department figures showed today in Washington. The median forecast of 43 economists surveyed by Bloomberg News called for an increase to 370,000. Other reports showed consumer confidence dropped to a two-month low and home prices climbed by the most since 2006.
The decrease in firings indicates the job market continues to mend after payrolls rose last month by the most since February. The world’s largest economy needs bigger gains in employment to prevent the lingering European debt crisis and approaching U.S. fiscal cliff from derailing the economic expansion.
“There’s a gradual improvement on the layoffs side,” said Peter Newland, an economist in New York for Barclays Plc, who projected claims would drop to 360,000. There will be “a bit of a rebound in the second half. It’s not going to be spectacular, but it should be better than the first half.”
Most stocks rose, giving the Standard & Poor’s 500 Index its longest rally since March. The S&P 500 advanced less than 0.1 percent to 1,402.8 at the close in New York.
The economic slowdown in Europe curtailed Britain’s exports in the second quarter, producing a record trade deficit, other data today showed.
Asia Slowdown
Elsewhere, China’s inflation and industrial production growth cooled in July, and central banks in Japan and South Korea saw little sign of price pressures, underscoring the scope for monetary stimulus should the European crisis deepen.
U.S. jobless claims estimates in the Bloomberg survey ranged from 359,000 to 385,000. The Labor Department revised the previous week’s figure up to 367,000 from an initially reported 365,000.
A Labor Department spokesman said last week that today’s data should be clear of any influence from the annual auto plant retooling closures that make it difficult to adjust the data for seasonal variations. That would make it a truer reading of underlying labor market conditions.
The employment report for July issued last week showed 163,000 workers were added to payrolls last month following a 64,000 increase in June.
Losing Confidence
Rising gasoline prices may be preventing Americans from getting a lift from the improvement in hiring.
The Bloomberg Consumer Comfort Index dropped to minus 41.9 in the week ended Aug. 5 from minus 39.7 as Americans became more discouraged about the economy. The gauge hasn’t climbed since the end of June. Americans’ view of the economy fell to the lowest level since February.
“The American public is downright sour on their own economic prospects and those of the nation as a whole,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York.
Nonetheless, there are signs that housing, the industry that triggered the worst recession in the post-World War II era, is stabilizing.
The median sales price for single-family homes was $181,500 in the second quarter, up 7.3 percent from the same period last year, the strongest annual increase since the first quarter of 2006, according to a report today from the National Association of Realtors. Values increased in 110 of 147 metropolitan areas measured from the same time last year, compared with 74 in the first quarter.
Trade Deficit
Another report today showed the trade deficit in the U.S. shrank in June as imports dropped and exports climbed. The gap narrowed 11 percent to $42.9 billion, the smallest since December 2010, Commerce Department figures showed. Exports rose to a record on demand for autos and industrial engines.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
LinkedIn Corp. (LNKD) of Mountain View, California, the biggest professional-networking website, is showing an increase in activity among job-seeking customers.
“We’re about two times where we were last year in terms of hiring happening through the LinkedIn products within our customers,” Chief Financial Officer Steven Sordello said on an Aug. 2 earnings call. “Given European weakness where job growth has been slower, that rate is even higher.”
Reducing Headcount
Cisco Systems Inc. (CSCO) is among companies announcing job cuts. The biggest maker of computer-networking equipment plans to eliminate about 1,300 jobs, or 2 percent of the workforce, as Europe’s debt crisis and sluggish corporate spending threaten sales.
Last week’s jobs report also showed the unemployment rate climbed to a five-month high of 8.3 percent in July. Joblessness has been above 8 percent since February 2009 -- the longest stretch in the post-World War II era.
Fed officials, at the conclusion of a two-day meeting last week, left unchanged their statement that economic conditions would likely warrant holding the benchmark interest rate target near zero at least through late 2014.
The Federal Open Market Committee “will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability,” it said in a statement. The group “expects economic growth to remain moderate over coming quarters and then to pick up very gradually.”
To contact the reporters on this story: Michelle Jamrisko in Washington at mjamrisko@bloomberg.net; Alex Kowalski in Washington at akowalski13@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Jobless Claims in U.S. Unexpectedly Fall as Labor Market Mends
Aaron M. Sprecher/Bloomberg
A recruiter, left, talks to a job seeker during Coast to Coast Career Fairs event in Houston, Texas, on Aug. 7, 2012.
A recruiter, left, talks to a job seeker during Coast to Coast Career Fairs event in Houston, Texas, on Aug. 7, 2012. Photographer: Aaron M. Sprecher/Bloomberg
Aug. 9 (Bloomberg) -- U.S. initial jobless claims unexpectedly dropped by 6,000 to 361,000 in the week ended Aug. 4, Labor Department figures showed today in Washington. Separately, the U.S. trade deficit shrank 11 percent in June to $42.9 billion, the smallest since December 2010, according to the Commerce Department. Betty Liu and Michael McKee report on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Aug. 9 (Bloomberg) -- Michael Hanson, a senior U.S. economist at Bank of America Corp., talks about the outlook for U.S. economy and Federal Reserve policy. Hanson speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)
May 10 (Bloomberg) -- John Chambers, chief executive officer of Cisco Systems Inc., talks about the company's third-quarter results and fourth-quarter sales and profit forecast, which missed analysts' estimates. Cisco said yesterday that profit before some costs in the period ending in July will be 44 cents to 46 cents a share with a revenue range of $1.4 billion to $1.8 billion. Analysts projected profit of 48 cents on sales of $12 billion, according to Bloomberg. Chambers speaks with Betty Liu and Dominic Chu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Aug. 8 (Bloomberg) -- Federal Reserve Bank of Dallas President Richard Fisher talks about monetary policy and the potential risks of additional economic stimulus. He speaks with Tom Keene and Sara Eisen on Bloomberg Television's "Surveillance. (Source: Bloomberg)
Aug. 9 (Bloomberg) -- A. Gary Shilling, president of A. Gary Shilling & Co. and a Bloomberg View columnist, talks about the global economy, the U.S. housing market and Federal Reserve policy. He speaks with Tom Keene, Sara Eisen and Scarlet Fu on Bloomberg Television's "Surveillance." (Shilling is a Bloomberg View columnist. The opinions expressed are his own. Source: Bloomberg)
Jobless Claims in U.S. Unexpectedly Fall as Labor Market Mends
Aaron M. Sprecher/Bloomberg
Jobless claims unexpectedly dropped by 6,000 to 361,000 in the week ended Aug. 4, Labor Department figures showed today in Washington.
Jobless claims unexpectedly dropped by 6,000 to 361,000 in the week ended Aug. 4, Labor Department figures showed today in Washington. Photographer: Aaron M. Sprecher/Bloomberg
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