Oct. 24 (Bloomberg) -- More Americans than forecast filed applications for unemployment benefits last week as California continued to work through a backlog.
Jobless claims decreased by 12,000 to 350,000 in the week ended Oct. 19 from a revised 362,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for a decrease to 340,000. Applications in California remained elevated and analysts weren’t able to determine how many non-federal workers filed due to the government shutdown, a Labor Department spokesman said.
Firings may gradually diminish as a backlog of claims processing in California work their way out of the data and the end to the closure of government prompts companies to call back staff. A slower-than-expected pace of hiring in September may reflect companies’ hesitance to ramp up payrolls as lawmakers in Washington feuded over the budget and now prepare for the next round of negotiations.
“It’s going to be a couple more weeks before we get a clean reading on initial claims,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “All in all, claims are signaling that the job market is treading water.”
Another report showed the trade deficit in the U.S. was little changed in August as imports and exports stalled, indicating a loss of momentum in global economic growth. The gap increased 0.4 percent to $38.8 billion from a revised $38.6 billion in July that was smaller than previously reported, the Commerce Department reported. The median forecast in a Bloomberg survey of 71 economists called for a $39.4 billion deficit.
Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in December rose 0.2 percent to 1,745.5 at 8:49 a.m. in New York.
While the claims data continued to be released during the lapse in appropriations, the shutdown delayed the Labor Department’s September employment report and other government data releases.
Federal workers filed about 44,100 claims for jobless benefits two weeks ago, down from about 70,100 the prior period. Those were tallied in a separate category and didn’t influence the headline reading.
The partial government shutdown this month trimmed 0.25 percentage point from fourth-quarter economic growth and cost the U.S. 120,000 jobs in October, Jason Furman, head of the Council of Economic Advisers, said at a White House briefing earlier this week.
Economists’ estimates in the Bloomberg survey for jobless claims ranged from 320,000 to 365,000 after the prior week’s previously reported 358,000. Applications surged in prior weeks as California worked through a backlog caused by a switch in computer systems.
The four-week average of claims, a less volatile measure than the weekly figures, increased to 348,250 last week from 337,500. No states were estimated last week.
The number of people continuing to receive jobless benefits decreased by 8,000 to 2.87 million in the week ended Oct. 12. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who have used up their traditional benefits and are now collecting emergency and extended payments declined by about 54,200 to 1.33 million in the week ended Oct. 5.
The unemployment rate among people eligible for benefits held at 2.2 percent in the week ended Oct. 12.
Thirty-six states and territories reported an increase in claims, while 17 reported a drop. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate.
The September payrolls report, released earlier this week after government offices reopened, showed a labor market that had little momentum heading into the shutdown. Employers in the U.S. added fewer workers to payrolls than projected in September, Labor Department figures showed.
The addition of 148,000 workers followed a revised 193,000 gain in August that was larger than initially estimated. Unemployment fell to 7.2 percent, the lowest level since November 2008.
October employment data are scheduled for release Nov. 8.
While companies have held back on increasing payrolls in the face of sluggish economic growth, online retailer Amazon.com Inc. is making longer-term plans to add to staff. The Seattle-based company announced this week that it plans to hire more than 1,000 full-time employees for a one-million-square-foot warehouse in Baltimore, and another 1,000 workers for two sites in Florida.
The weaker-than-expected hiring pace in September supported forecasts that the Federal Reserve will hold off on reducing monthly asset purchases until next year. The central bankers will pare the monthly pace of asset buying to $70 billion from $85 billion at their March 18-19 meeting, according to the median of 40 responses in a Bloomberg survey last week.
The Fed policy makers are scheduled to meet Oct. 29-30, when they will evaluate the strength of the recovery with a less complete set of figures than usual due to the suspension of reports and collection of data during the government closure. Postponements include figures on third-quarter gross domestic product, which were originally scheduled for release Oct. 30 and have been moved to Nov. 7.
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