Initial Jobless Claims in U.S. Decline on Seasonal Adjustment Difficulties
Claims for U.S. unemployment benefits fell more than forecast last week as an atypical calendar alignment made it more difficult for the government to adjust the data for seasonal changes.
Applications for jobless benefits dropped by 37,000 in the week ended Sept. 24 to 391,000, the fewest since April, Labor Department figures showed today. Economists forecast 420,000 claims, according to the median estimate in a Bloomberg News survey. An agency official said the data probably reflected a “slight mistiming” in the seasonal factors used to modify the figures.
The pace of firings has remained little changed this year while companies are reluctant to hire at a time when the economy is slowing and concerns of a European default rise. Federal Reserve policy makers last week announced more unconventional measures to boost jobs and the economy.
“Apart from what might be an anomaly, the underlying trend in the labor force is still disappointing,” said Sean Incremona, a senior economist at 4Cast Inc. in New York. “There is a lot of economic uncertainty weighing on the broader economy.”
The U.S. economy grew at a revised 1.3 percent pace in the second quarter, faster than estimated last month and helped by exports and spending on services, a report from the Commerce Department showed today. The rise in gross domestic product compares with a 1 percent gain previously calculated, and followed a 0.4 percent increase in the first three months of the year.
Stock-index futures extended earlier gains after the report. The contract on the Standard & Poor’s 500 Index expiring in December rose 1.5 percent to 1,165.9 at 8:51 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 2.02 percent from 1.98 percent late yesterday.
Estimates for first-time claims ranged from 410,000 to 430,000 in the Bloomberg survey of 48 economists. The Labor Department initially reported the prior week’s applications at 423,000.
A 53-week calendar year, a late Easter and the end of a quarter have played havoc with the government’s ability to adjust the data for seasonal variations, the Labor Depart official said as the figures were released. “It’s been a real challenge this year” to adjust the data, he said.
The figures used to adjust the data typically look for a drop in un-adjusted claims heading into the end of a quarter. For last week however, the seasonal adjustment factors predicted unadjusted claims would rise by 0.4 percent, the Labor official said. Instead, unadjusted applications followed the typical patterns at the end of quarters and plunged by 8.2 percent, leading to the even bigger drop in the adjusted data.
The economy probably created more jobs in the year ended March 2011 than currently estimated, a separate Labor Department report showed today.
The number of jobs added to payrolls will probably be increased by 192,000 from the current estimate of 1.32 million, the agency said on its Web site in preliminary projections. The Labor Department uses records from state jobless benefit taxes to benchmark its employment survey estimates.
The four-week moving average of claims, a less-volatile measure, fell to 417,000 from 422,250.
The number of people continuing to collect jobless benefits dropped by 20,000 in the week ended Sept. 17 to 3.73 million. 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 75,550 to 3.58 million in the week ended Sept. 10.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3 percent in the week ended Sept. 17, today’s report showed. Forty-two states and territories reported an increase in claims during that week, while 11 showed a decrease.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Fed policy makers last week announced they would replace some notes in their portfolio with longer-term Treasuries to further reduce borrowing costs and keep the economy from relapsing into a recession.
“Economic growth remains slow,” the Federal Open Market Committee said in a statement. While officials said they “expect some pickup in the pace of recovery over coming quarters,” they anticipate “the unemployment rate will decline only gradually toward levels” consistent with their mandate for maximum employment.
President Barack Obama’s $447 billion jobs plan would help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year, according to economists surveyed by Bloomberg News.
The legislation, submitted to Congress this month, would increase gross domestic product by 0.6 percentage point next year and add or keep 275,000 workers on payrolls, the median estimates in the survey of economists showed. The program would also lower the jobless rate by 0.2 percentage point in 2012, economists said.
The economy generated 56,000 net payrolls in September while the unemployment rate remained unchanged at 9.1 percent, according to the median forecast in a preliminary Bloomberg survey of economists ahead of the Labor Department’s Oct. 7 report.
Total payrolls were unchanged last month, the weakest reading since September 2010, the Labor Department said Sept. 2.
Some companies are still trimming staff. United Technologies Corp. (UTX)’s Sikorsky helicopter unit plans to cut about 540 jobs, 3 percent of its global workforce, as orders slow from international customers and the U.S. curbs defense spending.
Employees in Poland and Connecticut have been informed of the decision, Paul Jackson, a spokesman, said last week. Union members in Connecticut have been offered a voluntary separation package, Jackson said.
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