Fewer Americans filed applications for unemployment benefits last week as damage to the labor market caused by superstorm Sandy began to subside.
Jobless claims decreased by 41,000 to 410,000 in the week ended Nov. 17, the Labor Department reported today in Washington. The number of applications matched the median forecast of 48 economists surveyed by Bloomberg.
The level of claims reflects the economic drag associated with Sandy, which made landfall in the Northeast on Oct. 29, killing more than 100 in the U.S. and leaving about 8 million homes and businesses without power for days. Before the storm-related surge in unemployment applications, companies limited hiring in the wake of a global economic slowdown and uncertain U.S. fiscal outlook.
Sandy is a “temporary setback for the job market,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who correctly forecast the figure. Beyond the storm, “the job market is still very weak and it’s going to remain that way until we get some fiscal clarity.”
Stock-index futures fluctuated between gains and losses after the figures, with the contract on the Standard & Poor’s 500 Index expiring in December rising less than 0.1 percent to 1,387.1 at 8:44 a.m. in New York.
The four-week average, a less volatile measure than the weekly figures, rose to 396,250 from 386,750.
Economists’ estimates for claims last week ranged from 365,000 to 500,000. Claims in the previous week were revised to 451,000 from a previously reported 439,000.
Applications in New York during the week ended Nov. 10 jumped 43,956 and those in New Jersey surged 31,094. Those data are reported with a one-week lag. Forty states and territories showed an increase in claims, while 13 reported a decrease.
“Our numbers are still distorted by Hurricane Sandy,” a Labor Department official said as figures were released. There are still “states filing excess claims,” he said.
The number of people continuing to receive jobless benefits decreased by 30,000 in the week ended Nov. 10 to 3.34 million. The continuing claims figure doesn’t include Americans receiving extended benefits under federal programs.
Those who have exhausted their traditional benefits and are collecting emergency and extended payments rose by almost 62,000 to 2.19 million in the week ended Nov. 3.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly payrolls report -- accelerates.
It may be weeks before claims fully subside as workers who lost jobs because of Sandy continue to file. The storm also took a toll on shopping malls and auto showrooms, pushing down retail sales in October.
Sandy posed an additional challenge to companies already affected by the recession in Europe, which has limited export orders, and concerns about the so-called fiscal cliff of $607 billion of spending cuts and tax increases set to take effect in January unless Congress acts.
“We believe that with the political uncertainty in Europe and the U.S. that you are going to see pretty flat growth rate,” William Sullivan, chief executive officer of Agilent Technologies Inc., said on a Nov. 19 earnings call. “People are hesitating.”
“You can easily come into an environment of relatively low growth,” next year, he said. The scientific equipment manufacturer is based in Santa Clara, California.
At the same time, some companies are adding staff. Chrysler Group LLC will take on 1,250 workers at three U.S. plants to boost output of pickups and engines after the Auburn Hills, Michigan-based automaker delivered almost 1.38 million cars and light trucks this year through October, a 23 percent increase from the same period in 2011.
Bigger gains in the housing market may require faster job growth, according to Bill Wheat, chief financial officer at D.R. Horton Inc., the second-largest U.S. homebuilder by revenue.
“We’re seeing small amounts of job growth right now,” Wheat said at a Nov. 15 conference. “Consumers are spending money, they’re buying cars. They’re starting to buy a few more homes,” We’re going to need to see overall improvement in the economy, strengthening of the economy and the job market to see a long-term continued growth in housing.”