More Americans Than Forecast Filed Jobless Claims
More Americans than forecast filed applications for unemployment benefits last week, adding to concern the labor market is slackening.
Jobless claims decreased by 3,000 in the week ended Sept. 15 to 382,000, Labor Department figures showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg projected 375,000.
Looming tax increases and government spending cuts slated to take effect next year, should lawmakers fail to act, may block any pickup in hiring following last month’s smaller-than-projected gain in payrolls. The Federal Reserve last week undertook a third round of asset purchases in a bid to reduce joblessness that has held above 8 percent for more than three years.
“The problems are more on the hiring side than the layoffs side,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who projected a rise to 385,000 claims. “If they panic and start cutting workers, that would raise an immediate red flag because layoffs would be a recipe for another recession.”
Stock-index futures held earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in December fell 0.4 percent to 1,446.8 at 8:43 a.m. in New York as economic data from China to Japan and Europe increased concern a global slowdown is worsening.
Estimates in the Bloomberg survey ranged from 360,000 to 390,000. The Labor Department revised the previous week’s figure to 385,000 from an initially reported 382,000. Last week’s data covered the period surveyed by the government to calculate the September employment data.
A Labor Department spokesman said there was nothing unusual in the state data last week. States and territories that reported an increase in claims as a result of Tropical Storm Isaac two weeks ago, including Louisiana and Puerto Rico, didn’t indicate the weather had any influence last week, the spokesman said as the data was released to the press.
The spokesman also said there was no indication the teachers strike in Illinois had any influence.
The four-week moving average, a less volatile measure than the weekly figures, climbed to 377,750 last week from 375,750.
Today’s report showed the number of people continuing to receive jobless benefits dropped by 332,000 in the week ended Sept. 8 to 3.27 million.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 60,700 to 2.16 million in the week ended Sept. 1.
The unemployment rate among people eligible for benefits held to 2.6 percent, today’s report showed.
Thirty-four states and territories reported a decrease in claims, while 19 reported an increase. These figures are reported with a one-week lag.
Data on state jobless rates are scheduled to be released by the Labor Department tomorrow at 10 a.m. Washington time.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
The pace hiring took a tumble last month. Payrolls rose by 96,000 workers in August after a revised 141,000 increase in July that was smaller than initially estimated, the Labor Department said on Sept. 7.
Jobless claims could ease as businesses boost headcounts in advance of the year-end holidays. Kohl’s Corp. (KSS) of Menomonee Falls, Wisconsin, the third-largest U.S. department-store company, plans to hire more than 52,700 workers to help with year-end holiday sales, an increase of more than 10 percent from last year, according to a company statement issued this week.
Pier 1 Imports Inc. (PIR), the Fort Worth, Texas-based home furnishings retailer, will reopen three remodeled stores within a month to beat the holiday sales rush, Alexander Smith, the company’s president and chief executive officer, said on a Sept. 13 earnings call.
The unemployment rate unexpectedly dropped to 8.1 percent in August from 8.3 percent as more Americans left the labor force, the payrolls report also showed earlier this month. The jobless rate has been stuck above 8 percent since February 2009, the longest stretch in monthly records going back to 1948.
The lack of progress in the labor market persuaded the Fed to announce further accommodation last week. The Fed said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month as it seeks to boost growth and reduce unemployment.
“If the outlook for the labor market does not improve substantially, the committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases and employ its other policy tools as appropriate,” the Federal Open Market Committee said Sept. 13 in a statement at the end of a two-day meeting in Washington.
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