More Americans than forecast filed applications for unemployment benefits last week, signaling labor-market progress will proceed fitfully.
Jobless claims in the week ended Nov. 9 fell to 339,000 from a revised 341,000 the week before that was higher than initially reported, the Labor Department said today in Washington. The median forecast of 51 economists surveyed by Bloomberg called for a drop to 330,000.
The fiscal battles that have gripped Washington and caused across-the-board budget cuts earlier this year and the partial federal shutdown last month are prompting companies such as Lockheed Martin Corp. (LMT) to cut staff. At the same time, another report showed consumer confidence increased for the first time in seven weeks, indicating the worst of the psychological damage from the political gridlock has passed.
“Until we get beyond these political and fiscal uncertainties, we’re likely to see this stop-and-start that we’ve had in the labor market,” said Millan Mulraine, director of U.S. rates research at TD Securities USA LLC in New York, who predicted jobless claims would come in at 340,000. “Once we get beyond these issues, the labor market is likely to reflect a more buoyant economy.”
Stocks rose, extending records for benchmark indexes, as comments from Janet Yellen signaled she will continue the Federal Reserve’s stimulus efforts. The Standard & Poor’s 500 Index climbed 0.5 percent to 1,790.62 at the close in New York.
In testimony during her nomination hearing before the Senate Banking Committee today, Yellen, the Fed’s vice chairman, voiced her commitment to using bond purchases known as quantitative easing to boost growth and lower unemployment that remains above 7 percent more than four years after the economy began to recover from the deepest recession since the Great Depression.
Elsewhere today, data showed the euro area’s recovery almost came to a halt in the third quarter as German growth slowed, France’s economy unexpectedly shrank and Italy extended its record-long recession. Economic growth also slowed in Japan as the nation’s trade deficit widened and gains in business investment cooled, according to figures from the Cabinet Office.
In the U.S., the Bloomberg Consumer Comfort Index rose to a five-week high of minus 33.9 in the week ended Nov. 10 from minus 37.9 the prior period. Uneasiness resulting from the partial government shutdown, which ended in the middle of October, had knocked the confidence measure down to its lowest level in more than a year.
Other reports today showed worker productivity grew less than forecast in the third quarter and the trade deficit climbed more than projected in September.
The measure of employee output per hour increased at a 1.9 percent annualized rate, after a revised 1.8 percent pace in the prior three months that was lower than last estimated, a Labor Department report showed. The median forecast in a Bloomberg survey of 59 economists called for a 2.2 percent gain. Expenses per worker dropped at a 0.6 percent rate.
The gap between exports and imports increased 8 percent to $41.8 billion, a four-month high, from $38.7 billion in August, the Commerce Department reported. The median forecast in a Bloomberg survey of 72 economists called for a $39 billion deficit.
Economists’ claims forecasts in the Bloomberg survey ranged from 325,000 to 350,000. The prior week’s claims were revised up from an initial reading of 336,000.
The four-week average of claims, a less-volatile measure, fell to 344,000 last week from 349,750 the prior week. The reading compares with an average 328,750 at the end of August, before delays in processing claims in California caused the numbers to see-saw.
The number of applications from five states and territories, including California, were estimated because the holiday-shortened workweek prevented a complete tabulation, the Labor Department said. Veterans Day was celebrated in the U.S. on Nov. 11.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate. Federal Reserve policy makers are waiting to see more evidence the economy will continue to improve before they trim $85 billion in monthly purchases of Treasury and mortgage debt.
Lockheed Martin, the largest U.S. government contractor, said today it will cut 4,000 jobs and close some facilities because of decreased federal spending. Operations will close by mid-2015 in Newtown, Pennsylvania; Akron, Ohio; Goodyear, Arizona; and Horizon City, Texas, the company said in a statement. Bethesda, Maryland-based Lockheed, whose products include the F-35 jet, will also close several buildings in Sunnyvale, California.
A report last week showed American employers added 204,000 workers to payrolls in October even as gridlock over the budget in Washington forced the partial closing of federal agencies, topping the most optimistic forecast in a survey of economists.
Retailers are among those hiring as they gear up for their busiest season of the year. Retail employment grew by 44,400 in October, the most since June, according to the Labor Department.
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