U.S. Jobless Claims Unexpectedly Rise on Holiday Distortions
Applications for U.S. unemployment benefits unexpectedly rose last week to an almost nine-month high, showing fluctuation in the filings that typically occurs around the year-end holidays.
Jobless claims climbed by 10,000 to 379,000 in the period ended Dec. 14, the most since the end of March, Labor Department data showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for a decrease to 336,000. It’s best to focus on the four-week average during the holiday season to determine the underlying trend, a government spokesman said as the figures were released.
Unemployment that fell last month to a five-year low and progress in hiring helped prompt Federal Reserve policy makers to reduce their $85 billion in monthly bond buying yesterday at the conclusion of a two-day meeting. Gains in payrolls are also helping lift consumer confidence, brightening the prospects for retailers during the holiday-shopping period.
“Claims at this time of year are very volatile, so we don’t want to put too much stock in each week’s fluctuations,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, and the best claims forecaster over the past two years, according to data compiled by Bloomberg. “Layoffs are low, which is very encouraging.”
Stock-index futures held earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in March fell 0.1 percent to 1,803.1 at 8:33 a.m. in New York after closing at a record high yesterday.
Estimates in the Bloomberg survey of economists ranged from 310,000 to 375,000. The prior week was previously reported at 368,000. No states estimated claims last week.
The data tend to be volatile around the Thanksgiving and Christmas holidays as seasonal adjustment is difficult to calculate, the Labor Department spokesman said last week.
The four-week average of claims, a less-volatile measure than the weekly figure, climbed to 343,500, the highest in a month, from 330,250 in the prior week.
The number of people continuing to receive jobless benefits increased by 94,000 to 2.88 million in the week ended Dec. 7.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. Those job-seekers rose by about 125,100 to 1.37 million in the week ended Nov. 30. These payments are set to lapse at year’s end as Congressional Democrats failed in a last-ditch effort to extend the assistance before the House adjourned last week.
The unemployment rate among people eligible for benefits increased to 2.2 percent in the week of Dec. 7 from 2.1 percent the prior period.
Forty-six states and territories reported an increase in claims, while seven 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. Employers have added an average 188,550 per month so far in 2013, beating last year’s 182,750 monthly tally.
The Fed announced yesterday that it would start trimming its monthly bond purchases by $10 billion to $75 billion starting next month, taking the first step toward unwinding the unprecedented stimulus that Chairman Ben S. Bernanke put in place to help the economy recover from the worst recession since the 1930s.
“In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the committee decided to modestly reduce the pace” of purchases, the Federal Open Market Committee said yesterday in a statement.
One bright spot for employment is a thriving auto industry that’s lifting hiring prospects at vehicle makers such as General Motors Co. The Detroit-based company plans to spend $1.3 billion to upgrade five U.S. factories, which will create or retain 1,000 jobs, according to a statement earlier this week.
The site upgrades “continue the momentum of a resurgent auto industry,” said Mark Reuss, president of GM’s North America operations.
Auto sales are on pace for their best year since 2007. Cars and light trucks sold at a 16.3 million annualized rate in November, compared with a 13.3 million average since the end of the recession, according to data from Ward’s Automotive Group.
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