More Americans than forecast filed applications for unemployment benefits during the holiday-shortened week, signaling limited recovery in the labor market.
Jobless claims climbed by 6,000 to 402,000 in the week ended Nov. 26 that included the Thanksgiving holiday, Labor Department figures showed today in Washington. The median forecast of 43 economists in a Bloomberg News survey called for a drop to 390,000. The number of people on unemployment benefit rolls and those getting extended payments increased.
Some companies are still trimming staff and others are reluctant to add workers until demand picks up and there’s more clarity on tax breaks due to expire at year-end. Faster hiring is needed to spur consumer spending, which accounts for about 70 percent of the economy, and reduce a jobless rate stuck near 9 percent that’s a concern for Federal Reserve officials.
“Companies are still in a mode of hiring based on absolute need,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit. “They’re not adding a whole lot of workers for future growth. Employers are waiting to see what happens with the payroll tax cut.”
Jobless benefits applications were projected to decrease from 393,000 initially reported for the prior week, according to the survey median. Estimates ranged from 380,000 to 415,000. The Labor Department revised the prior week’s figure up to 396,000.
Stock-index futures were little changed after the report. The contract on the Standard & Poor’s 500 Index expiring this month declined 0.1 percent to 1,244.5 at 8:33 a.m. in New York.
Effect of Holidays
A Labor Department spokesman said there was nothing unusual in the state level data last week. Because of the holiday, the seasonal-adjustment factors projected claims would drop by about 75,000, instead they fell by about 70,000, pushing up the adjusted reading, the spokesman said. It’s often difficult to account for the effect of holidays on weekly claims.
Today’s data showed the four-week moving average, a less volatile measure than the weekly figures, rose to 395,750 last week from 395,250, which was a seven-month low.
The number of people continuing to receive jobless benefits climbed by 35,000 in the week ended Nov. 19 to 3.74 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 69,500 to 3.52 million in the week ended Nov. 12.
Some employers see the need for more workers. Williams-Sonoma Inc., a retailer of high-end home goods, raised its annual profit forecast and will “continue to look for a few key jobs” in online sales, Chief Executive Officer Laura Alber said in a Nov. 17 conference call with analysts.
Vail Resorts Inc. is among those trimming their workforce. The Broomfield, Colorado-based owner of ski resorts said yesterday it plans to make “selected staff reductions” as it reorganizes.
The unemployment rate among people eligible for benefits increased to 3 percent from 2.9 percent in the prior week, today’s report showed.
Forty-six states and territories reported an increase in claims, while 6 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.
Payrolls may have climbed by 125,000 workers in November, after rising 80,000 the prior month, economists surveyed by Bloomberg projected ahead of a Labor Department report due tomorrow. The unemployment rate likely held at 9 percent, it may show.
The Fed’s view is that the economy, while strong enough to skirt a recession, remains too weak to bring down the unemployment rate that’s been near 9 percent or higher for more than two years.
“Hiring was generally subdued,” the central bank said in its Beige Book survey released yesterday. “Overall economic activity increased at a slow to moderate pace” in most of its 12 districts, it said.