Fewer Americans than forecast filed first-time claims for unemployment insurance last week, an indication demand is strong enough to maintain current staff levels.
Applications for jobless benefits fell 9,000 to 363,000 in the week ended Oct. 27, the fewest in three weeks, the Labor Department reported today in Washington. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. Data for New Jersey and the District of Columbia were estimated because those offices were closed due to Hurricane Sandy, a spokesman said as the figures were released.
Fewer firings may mean companies are poised to boost hiring should the economy avert damage from the package of tax increases and spending cuts that will take effect next year if lawmakers fail to act. A Labor Department report tomorrow may show employers took on 125,000 workers in October, not enough to keep the jobless rate from rising to 7.9 percent from 7.8 percent, according to the Bloomberg survey median.
“Claims have been on a mildly improving trajectory,” said Gennadiy Goldberg, a U.S. strategist at TD Securities Inc. in New York who forecast the number of applications would drop to 365,000. “We’re definitely getting fewer firings, but hirings are picking up very gradually, and that’s why you’re only seeing gradual improvement in the labor market.”
Stock-index futures were little changed after the report. The contract on the Standard & Poor’s 500 Index maturing in December rose less than 1 percent to 1,407.50 at 8:40 a.m. in New York. The yield on the benchmark 10-year Treasury note rose to 1.72 percent from 1.69 percent late yesterday.
In a separate report, the ADP Research Institute said today companies expanded payrolls in October by the most in eight months, an indication the U.S. labor market was on the upswing at the start of the fourth quarter. The 158,000 increase followed a revised 114,000 gain in September, according to Roseland, New Jersey-based ADP.
Estimates for first-time jobless claims ranged from 355,000 to 380,000 in the Bloomberg survey of 49 economists. The Labor Department revised the prior week’s figures up from an initially reported 370,000.
The productivity of U.S. workers rose more than projected in the third quarter as companies wrung out more output from their employees in order to keep a lid on costs, another Labor Department report today showed. The measure of employee output per hour climbed at a 1.9 percent annual rate, the same as the prior quarter, and labor expenses unexpectedly dropped at a 0.1 percent pace.
A Labor Department official today said last week’s claims data had yet to be influenced by the fallout from Hurricane Sandy. If there was to be any impact it will show up in the next couple of weeks, the spokesman said.
The four-week moving average, a less-volatile measure, fell to 367,250 from 368,750.
The number of people continuing to collect jobless benefits rose by 4,000 to 3.26 million in the week ended Oct. 20. 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 increased by about 47,000 to 2.13 million in the week ended Oct. 13.
The unemployment rate among people eligible for benefits held at 2.5 percent in the week ended Oct. 20. Twenty-three states and territories reported an increase in claims, while 30 reported a decrease.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Last month’s projected payroll gain would indicate the labor market has little momentum heading into 2013. Employment climbed by 146,000 a month on average in the third quarter.
Adding to the lot of unemployed Americans, EBay Inc., the world’s largest online marketplace, said Oct. 29 it will cut 325 jobs to improve efficiency. Newell Rubbermaid Inc., the maker of Sharpie pens and Calphalon cookware, said Oct. 26 it plans to cut 10 percent of its jobs in the next two-and-a-half years. The Atlanta-based company had 19,900 employees as of December.
Cuts in public spending are also hurting employment at government contractors, showing what could happen in the event the fiscal cliff materializes. Oshkosh Corp., the Wisconsin-based company that makes commercial trucks and supplies blast-resistant trucks to the U.S. Army and Marine Corps, said Oct. 26 it would cut 450 jobs in January due to lower demand from the Defense Department.
Rockwell Collins Inc. said it plans to cut 1,250 employees, or about 6 percent of its workforce, in the next year as the aerospace manufacturer’s defense revenue falls amid curtailed U.S. military spending.