Fewer Americans than forecast filed claims for unemployment insurance last week as the effects of Hurricane Sandy started to show up.
Applications for jobless benefits fell by 8,000 to 355,000 in the week ended Nov. 3, the Labor Department said today in Washington. One state said the loss of electricity due to the storm suppressed filings, while others said workers who lost their jobs as a result of the weather were starting to apply, a Labor Department spokesman said as the data were released to the press. The spokesman declined to identify the state affected by the power loss, saying it was department policy not to name individual states.
It may take three to four weeks to see the full impact, the spokesman said, which indicates claims may jump back in coming weeks as more storm-related applications begin to be processed. A Labor Department report last week showed the economy added more jobs than projected in October and the unemployment rate rose as hundreds of thousands of Americans rejoined the job search as prospects improved.
“When you see bad weather, there’s usually a drop in claims, and then you typically see a rebound in the next few weeks,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, who correctly forecast the number of initial filings. “Underneath the surface, job destruction has been trending very low. Layoffs aren’t the problem -- it’s the relatively weak pace of job creation.”
Economists forecast claims would be little changed from the prior week at 365,000, according to the median estimate in a Bloomberg survey. Projections ranged from 335,000 to 450,000 in the survey of 51 economists. The prior week’s reading was unrevised at 363,000.
The trade deficit in the U.S. unexpectedly shrank in September as exports rose, Commerce Department figures also showed today. The gap fell to $41.5 billion, the smallest since December 2010.
Stock-index futures held gains after the figures, with the contract on the Standard & Poor’s 500 Index expiring in December rising 0.3 percent to 1,392.9 at 8:57 a.m. in New York.
Sandy struck the U.S. and Caribbean last week, killing at least 177 people, according to the Associated Press. The storm hit New York and New Jersey as it came ashore Oct. 29. About 8.5 million homes and businesses were without power at its peak and may have caused as much as $20 billion in insured damage, according to Hiscox Ltd., the biggest Lloyd’s of London insurer by market value.
Economists at Goldman Sachs Group Inc. in New York project hurricane-related claims will rise by about 14,000 in the week ended Nov. 17, according to a report issued this week. It may take until late December before that distortion is unraveled, they said.
A less-volatile measure of claims, the four-week moving average, rose to 370,500 from 367,250, today’s report showed.
The number of people continuing to collect jobless benefits dropped by 135,000 to 3.13 million in the week ended Oct. 27, the fewest in four years. 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 20,000 to 2.15 million in the week ended Oct. 20.
The unemployment rate among people eligible for benefits fell to 2.4 percent in the week ended Oct. 27. Twenty-seven states and territories reported an increase in claims, while 26 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 week’s payroll report wasn’t affected by Hurricane Sandy. Businesses in the U.S. hired 184,000 workers in October, the most since February, indicating they see enough demand to expand even in the face of the tax increases and spending cuts slated for next year.
Even so, the employment increase indicates the labor market hasn’t been able to accelerate in 2012. Gains in total payrolls so far this year have averaged 157,000 a month, little changed from the 153,000 average for 2011.
A separate survey of households showed the jobless rate rose to 7.9 percent from 7.8 percent in September as 578,000 people joined the workforce is search of a job, swamping the 410,000 gain in employment.
General Motors Co. is among manufacturers hiring as the U.S. auto industry makes a comeback after government bailouts during the depths of the financial crisis.
Detroit-based GM, the largest U.S. automaker, has said it will hire about 10,000 workers as part of its plan to bring more work in-house. The new so-called Innovation Center in Warren, Michigan, is one of four facilities planned in the U.S.