Moody's: Labor Market ‘Not Going Anywhere Quickly’ as Weekly Jobless Claims Spike

Thursday, 04 Oct 2012 08:35 AM

 

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The number of Americans filing first-time claims for unemployment insurance payments rose last week, highlighting an uneven improvement in the labor market.

Applications for jobless benefits increased 4,000 to 367,000 in the week ended Sept. 29, Labor Department figures showed today. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. The prior week’s reading was the lowest in two months.

The pace of dismissals may clear the way for bigger hiring gains should U.S. lawmakers find a way to resolve the fiscal cliff of tax increase and spending cuts that will take effect next year if they fail to act. A Labor Department report Friday may show employers took on 115,000 workers in September, more than the prior month, while the jobless rate rose to 8.2 percent from 8.1 percent, according to the Bloomberg survey median.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

“We’re not going anywhere quickly in the jobs market,” said Ryan Sweet, senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who predicted applications would rise to 368,000. “The job market is just more of the same. Layoffs aren’t the big problem, it’s the lack of hiring.”

Estimates for first-time claims ranged from 355,000 to 380,000 in the Bloomberg survey of 51 economists. The Labor Department initially reported the prior week’s applications at 359,000.

‘Nothing Unusual’

A Labor Department official said there was “nothing unusual” that affected Thursday’s figures, and no states were estimated.

The four-week moving average, a less-volatile measure, was unchanged at 375,000.

The number of people continuing to collect jobless benefits also was unchanged at 3.28 million in the week ended Sept. 22. 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 1,400 to 2.16 million in the week ended Sept. 15. The number of people receiving extended benefits climbed by 18,800 after an increase in New York’s jobless rate allowed dismissed workers in that state to again become eligible, a Labor Department spokesman said.

Jobless Rate

The unemployment rate among people eligible for benefits held at 2.6 percent in the week ended Sept. 22. Eighteen states and territories reported an increase in claims, while 35 reported a decrease.

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

A report yesterday from ADP Employer Services showed businesses hired a more-than-forecast 162,000 workers in September. Friday’s Labor Department report may paint a slightly weaker picture, with private payrolls rising by 128,000, according to the median economist estimate.

September’s projected gain suggests headcounts rose by an average of 117,000 each month in the third quarter, the second-weakest pace in two years.

A lack of progress on the employment front persuaded the Federal Reserve to announce further monetary accommodation this month. The central bank said it will expand its holdings of long-term securities by purchasing $40 billion of mortgage debt a month until the labor market improves significantly.

Adding to the pool of fired workers, Campbell Soup Co., the world’s largest soup maker, said Sept. 27 it plans to close two plants that employ more than 700 in the U.S. as demand declines and productivity improves. Juniper Networks Inc., the world’s second-biggest maker of networking equipment, said Oct. 2 it will cut 500 jobs, or about 5 percent of its workforce, to trim expenses.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

© Copyright 2014 Bloomberg News. All rights reserved.

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