More Americans than forecast filed first-time claims for unemployment insurance payments last week as the labor market struggled to improve.
Applications for jobless benefits decreased 9,000 in the week ended Sept. 17 to 423,000, Labor Department figures showed today. Economists forecast 420,000 claims, according to the median estimate in a Bloomberg News survey. The average number of claims in the past month rose for a fifth straight week, to the highest level since July 16.
An elevated level of dismissals raises the odds U.S. companies may put off plans to increase employment, making it difficult for joblessness to fall below 9 percent. Citing ongoing weakness in the labor market, Federal Reserve policy makers announced yesterday they would use another unconventional monetary tool to spur economic growth and job gains.
“These numbers are consistent with a job market that is essentially in suspended animation,” said Brian Jones, an economist Societe Generale in New York, who correctly forecast the level of claims. “Anything that the Fed does to help the economy should help the labor market, but it takes time. We’ve got to see job growth before we can get more demand.”
Estimates for first-time claims ranged from 408,000 to 430,000 in the Bloomberg survey of 45 economists. The Labor Department initially reported the prior week’s applications at 428,000.
A Labor Department official said today as the figures were released that the latest week’s data included no special circumstances.
Today’s report represents claims applications that coincide with the survey week for the monthly non-farm payrolls report.
Stock-index futures maintained losses after the figures. The contract on the Standard & Poor’s 500 Index expiring in December declined 2.6 percent to 1,126.1 at 8:43 a.m. in New York. Treasuries rose, pushing down the yield on the benchmark 10-year note to 1.76 percent from 1.86 percent late yesterday.
The four-week moving average, a less-volatile measure, climbed to 421,000 from 420,500.
The number of people continuing to collect jobless benefits fell by 28,000 in the week ended Sept. 10 to 3.73 million. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 103,350 to 3.5 million in the week ended Sept. 3.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3 percent in the week ended Sept. 10, today’s report showed. Forty-three states and territories reported a decrease in claims during that week, while 10 had an increase.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Following a two-day meeting, Fed policy makers announced yesterday they would replace some notes in their portfolio with longer-term Treasuries to further reduce borrowing costs and keep the economy from relapsing into a recession.
“Economic growth remains slow,” the Federal Open Market Committee said in a statement describing the central bank’s actions. While officials said they “expect some pickup in the pace of recovery over coming quarters,” they anticipate “the unemployment rate will decline only gradually toward levels” consistent with their mandate for maximum employment.
The Fed left unchanged its pledge to keep the benchmark interest rate near zero through at least mid-2013 so long as unemployment remained high and the inflation outlook stayed “subdued.”
Total payrolls were unchanged last month, the weakest reading since September 2010, and the unemployment rate held at 9.1 percent, the Labor Department said Sept. 2.
There are some bright spots for employment in the U.S. Capital One Financial Corp., the lender that would become the fifth-biggest U.S. bank by domestic deposits with the purchase of an online bank from ING Groep NV, intends to take on another 1,800, the McLean, Virginia-based company said Sept. 19.
Union Pacific Corp. plans to hire 15,000 people in the next 5 years, Chief Executive Officer Jim Young told the Detroit Economic Club on Sept. 20.