Jobless Claims in U.S. Show Limited Labor Market Progress
The number of Americans filing first-time applications for unemployment benefits fell last week, returning to a level that shows the labor market is making limited progress.
Jobless claims decreased by 23,000 to 369,000 in the week ended Oct. 20 from a revised 392,000 the prior period, the Labor Department reported today in Washington. The drop comes after weeks of big swings in the figures caused by difficulties in adjusting the data for seasonal variations.
The data signals employers are seeing enough demand to maintain existing staffing levels even amid growing concern about a slowing global economy and the looming fiscal cliff of tax increases and government spending cuts that will take effect in 2013.
“Claims are signaling more of the same in the labor market,” said Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut, who forecast applications would drop to 370,000. “There is no pickup, nor any further deceleration. Employment growth is moving along at a pretty disappointing pace.”
The median forecast of 48 economists surveyed by Bloomberg called for a drop in claims to 370,000. Estimates ranged from 350,000 to 382,000. The Labor Department revised the previous week’s figure up from an initially reported 388,000.
The four-week moving average of jobless claims, a less- volatile measure than the weekly figures, rose to 368,000 last week from 366,500. At the end of September, before the start of the quarter, the average was 375,500.
Another report today showed demand for capital equipment such as computers and communications gear stagnated last month, a sign that a slowdown in business investment and exports is hurting the world’s largest economy. Orders for non-defense capital goods excluding aircraft were little changed in September after rising a smaller-than-previously estimated 0.2 percent the prior month, figures from the Commerce Department showed.
Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in December climbed 0.6 percent to 1,413.6 at 9:11 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 1.84 percent from 1.79 percent late yesterday.
Today’s claims report showed the number of people continuing to receive jobless benefits fell by 2,000 in the week ended Oct. 13, to 3.25 million.
Continuing claims don’t include those Americans receiving extended unemployment aid under federal programs. Those collecting emergency and extended payments decreased by about 46,700 to 2.09 million in the week ended Oct. 6.
Unemployment among people eligible for benefits held at 2.5 percent for a second week, today’s report showed.
Thirty-two states and territories reported an increase in claims two weeks ago, while 20 reported a drop. 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.
The slowing global economy has caused companies to miss growth targets and prompted Dow Chemical Co. (DOW), Advanced Micro Devices Inc. (AMD), Ebay Inc. (EBAY)’s PayPal and other companies to announce job cuts in recent weeks.
Dow, based in Midland, Michigan, and the largest U.S. seller of chemicals, this week announced that it would shed about 2,400 jobs and close 20 plants.
“The reality is we are operating in a slow-growth environment in the near-term,” Chief Executive Officer Andrew Liveris said in a written statement this week. “While these actions are difficult, they demonstrate our resolve to tightly manage operations -- particularly in Europe -- and mitigate the impact of current market dynamics.”
The Labor Department’s October employment report will be released Nov. 2, four days before U.S. voters go to the polls to elect a president. President Barack Obama and Republican challenger Mitt Romney have been sparring over how best to improve the economy and create jobs.
Payrolls rose 114,000 in September after a 142,000 increase the prior month, the Labor Department reported earlier this month. The unemployment rate fell to a three-year low of 7.8 percent from 8.1 percent.
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