Fewer Americans filed applications for unemployment benefits last week, indicating firings haven’t picked up following the partial government shutdown.
Jobless claims decreased by 9,000 to 336,000 in the week ended Nov. 2 from 345,000 the prior period, the Labor Department reported today in Washington. The median forecast of 53 economists surveyed by Bloomberg called for a decrease to 335,000. No states estimated their data last week, and there was nothing unusual in the figures, the Labor Department said.
Companies may be feeling more confident as vehicle sales and housing maintain gains and manufacturing shows signs of accelerating. Fewer dismissals set the groundwork for a pickup in hiring, which is needed to revive the consumer spending that accounts for about 70 percent of the economy.
“We’re still seeing a very low trend of job destruction, but this is just one side of the equation,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “The big issue for the job market over the last couple of years has not been job losses, it’s really been an issue of job creation, and that’s what we’re waiting for.”
Another report showed the world’s largest economy expanded in the third quarter at a faster pace than forecast, led by the biggest increase in inventories in more than a year as household purchases and business investment slowed. Gross domestic product rose at a 2.8 percent annualized rate after a 2.5 percent gain the prior three months, according to Commerce Department data.
Stock futures rose, after the Dow Jones Industrial Average closed at a record yesterday, as the European Central Bank lowered interest rates to fight a looming deflation risk. The contract on the Standard & Poor’s 500 Index maturing in December climbed 0.3 percent to 1,771 at 8:59 a.m. in New York.
The four-week average of claims, a less-volatile measure, fell to 348,250 last week from 357,500 the prior week.
Economists’ estimates in the Bloomberg survey ranged from 323,000 to 350,000. The prior week’s claims were revised from an initially reported 340,000.
The number of people continuing to receive jobless benefits rose by 4,000 to 2.87 million in the week ended Oct. 26.
Continuing claims don’t include Americans who have exhausted their traditional state aid and are receiving emergency and extended benefits under federal programs. Those job seekers climbed by about 65,000 to 1.37 million in the week ended Oct. 19.
The unemployment rate among people eligible for benefits held at 2.2 percent in the week of Oct. 26.
Thirty-four states and territories reported an increase in claims, while 19 reported a decrease. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate. A federal government shutdown during the first half of last month kept thousands of federal employees from working and delayed the Labor Department’s October payrolls report by a week. The report will come out tomorrow.
Employers added 120,000 workers to payrolls in October, down from a 148,000 gain the prior month, as the 16-day partial federal shutdown rippled through the labor market, according to the median forecast of economists surveyed by Bloomberg before tomorrow’s report. The jobless rate is projected to climb to 7.3 percent from an almost five-year low of 7.3 percent in September.
Last week, the Federal Reserve said it needs more evidence of better economic growth before it can reduce its $85 billion in monthly bond purchases. The central bank left unchanged its statement that it probably will hold its target interest rate near zero “at least as long as” unemployment exceeds 6.5 percent.
While manufacturing has been slow to add jobs this year, some companies are promising a turnaround. Apple Inc., the world’s most valuable company, is among those adding to U.S. headcount. The company said this month that it is opening a new plant in Mesa, Arizona, that will create 2,000 jobs. The plant will make components for Apple products and is part of a push to boost manufacturing in the U.S.
Other companies are still trimming payrolls, some to improve efficiency. Halliburton Co., a Houston-based oilfield services company, has been dismissing workers as part of a streamlining effort, Chief Executive Officer David Lesar said in an Oct. 21 conference call.
“We expect for there to be additional headcount reductions and related severance charges,” Lesar said, adding later in the call adding that the layoffs are mostly in North America. “We are expecting a large future payoff for these initiatives.”