Jobless Claims Fall More Than Forecast as Storm Impact Eases

Thursday, 06 Dec 2012 08:34 AM

 

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Fewer Americans than projected filed applications for unemployment benefits last week as disruptions caused by Superstorm Sandy waned.

Jobless claims decreased by 25,000 to 370,000 in the week ended Dec. 1, Labor Department figures showed Thursday in Washington. The median forecast of 52 economists surveyed by Bloomberg called for a drop to 380,000. A Labor Department spokesman said there was nothing unusual in last week’s data.

The mid-Atlantic region, which employs about 14 percent of U.S. workers, is recovering after Sandy. Apart from the storm-related damage — which may also be reflected in the November payrolls report Friday — employers will probably curb hiring until the risks from the global slowdown and looming U.S. fiscal tightening dissipate.

“There are a lot of things going on that make the data less reliable,” Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut, said before the report. At the same time, “there’s a lot of uncertainty heading into the fiscal cliff. It’s hard to say what the underlying trend in claims is going to be.”

Stock-index futures were little changed after the report. The contract on the Standard & Poor’s 500 Index maturing this month was at 1,407.3 at 8:34 a.m. in New York, down less than 0.1 percent from Wednesday’s close.

Sandy Wanes

Claims dropped by almost 24,000 in New Jersey two weeks ago and by 6,682 in New York, the two states most affected by the storm, the report showed.

The state data is reported with a one-week lag.

One state was estimated last week after computer problems in Oklahoma prevented it from generating the data, the Labor Department spokesman said as the figures were being released to the press.

Last week also marked the period when the unadjusted data shows the biggest percentage jump in applications, the spokesman said. Industries such as construction and tourism typically start letting workers go at this time of year, he said.

Estimates in the Bloomberg survey of economists ranged from 360,000 to 395,000. The Labor Department revised the previous week’s figure up to 395,000, from an initially reported 393,000.

The four-week moving average, a less volatile measure than the weekly figures, rose to 408,000 last week from 405,750.

Payroll Forecast

Payrolls grew by 86,000 in November after rising 171,000 the prior month, according to the Bloomberg survey median ahead of Labor Department figures due Friday. The unemployment rate held at 7.9 percent, economists predicted.

Employment probably took a hit from Sandy, the largest Atlantic storm ever to hit the nation and one that left about 8 million homes and businesses without power for days after making landfall in the Northeast on Oct. 29.

Thursday’s report showed the number of people continuing to receive jobless benefits dropped by 100,000 to 3.21 million in the week ended Nov. 24.

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 111,000 to 2.05 million in the week ended Nov. 17.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 2.5 percent in the week ended Nov. 24 from 2.6 percent in the prior week.

State Overview

Thirty-six states and territories reported a decline in claims, while 17 reported an increase. These data are reported with a one-week lag.

Initial jobless claims reflect weekly firings and tend to fall as job growth — measured by the monthly non-farm payrolls report — accelerates.

The bankruptcy of Hostess Brands Inc., the baker of Twinkies and Wonder bread, is likely to be one source of joblessness for some time. The Irving, Texas-based company on Nov. 22 began firing 15,000 workers, temporarily keeping about 3,200 of its remaining employees to clean plants and mothball equipment.

Among others reducing employment, Citigroup Inc. Thursday announced it will cut more than 11,000 jobs and pull back from some emerging markets to drive down costs as revenue dries up at global banks.

Declining dismissals, combined with a sustained pickup in hiring, are needed help spur consumer spending, which accounts for about 70 percent of the economy.

Companies adding employees as business grows include Sitel, a call-center operator owned by Onex Corp., Canada’s largest publicly traded buyout firm. Sitel this week said it plans to immediately begin hiring 3,000 workers at customer care locations in the U.S. and Canada.

© Copyright 2014 Bloomberg News. All rights reserved.

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