Jobless Claims in U.S. Exceed Forecast on Seasonal Shift

Thursday, 18 Oct 2012 09:10 AM

 

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More Americans than forecast filed applications for unemployment benefits last week, reflecting an unwinding of adjustments for seasonal swings at the start of a quarter.

Jobless claims increased by 46,000 to 388,000 in the week ended Oct. 13 from a revised 342,000 the prior period that was the lowest since February 2008, Labor Department figures showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg called for a rise in claims to 365,000.

The typical pattern of large increases in unadjusted claims at the start of the quarter seems to have shifted by a week in one state, causing the adjusted data to become volatile, a Labor Department spokesman said as the figures were released to the press. Through the ups and downs, the level of firing has been little changed, indicating that a lack of hiring is the main reason payrolls have failed to strengthen.

“At least a major part of the jump would be a correction from the prior week,” Tom Simons, an economist at Jefferies Group Inc. in New York, who projected a jump to 380,000, said before the report. Outside of that, “we’re seeing very gradual improvement in the labor market. The economy is just plodding along at the moment.”

Stock-index futures extended earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in December dropped 0.2 percent to 1,454 at 8:33 a.m. in New York.

Survey Results

Estimates in the Bloomberg survey ranged from 345,000 to 390,000. The Labor Department revised the previous week’s figure up from an initially reported 339,000.

Today’s report showed unadjusted claims in California dropped by 4,979 in the week ended Oct. 6. Last week the Labor spokesman said claims typically surge at the start of a quarter as people receiving benefits reapply in order for the government to recertify their eligibility.

In the most recent week, all states reported and none were estimated, the spokesman said.

The four-week moving average, a less volatile measure than the weekly figures, rose to 365,500 last week from 364,750. The average number of claims over the past two weeks was in line with the four-week average, indicating little change in the pace of firings outside the seasonal swings.

Last week included the 12th of the month, which coincides with the period the Labor Department uses in its survey of employers to calculate monthly payroll growth. The employment report for October will be released on Nov. 2, four days before the presidential election.

Presidential Vote

Economic issues including jobs are central to the race. Gallup’s daily tracking of registered voters conducted Oct. 10 through Oct. 16 showed President Barack Obama with 46 percent and Republican challenger Mitt Romney with 48 percent support. The margin of error is two percentage points.

Payrolls rose 114,000 in September after a 142,000 increase the prior month, according to Labor Department figures released earlier this month. The unemployment rate dropped to a three- year low of 7.8 percent from 8.1 percent.

Today’s report showed the number of people continuing to receive jobless benefits fell by 29,000 in the week ended Oct. 6 to 3.25 million.

The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

Extended Benefits

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 7,200 to 2.13 million in the week ended Sept. 29.

The unemployment rate among people eligible for benefits dropped to 2.5 percent from 2.6 percent in the prior week, today’s report showed.

Forty-nine states and territories reported an increase in claims two weeks ago, while 4, including California, reported a drop. 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.

Amazon.com Inc., the world’s biggest online retailer, is among employers taking on workers for the holiday season. The Seattle-based company said on Oct. 16 that it will add more than 50,000 seasonal positions, and didn’t specify how that compares with 2011. Macy’s Inc., the second-biggest U.S. department-store chain, plans to hire about 2,000 more workers than the 78,000 it hired last year.

Some companies cite the lack of faster progress in the job market as a reason for weak demand. Dollar Tree Inc., the U.S. operator of more than 4,500 discount stores, said third-quarter sales will be at the low end of its forecast.

“We’d like to see better employment,” Bob Sasser, chief executive officer, said on an Oct. 11 teleconference with analysts. “I’d prefer to have people with money in their pocket to spend.”


© Copyright 2014 Bloomberg News. All rights reserved.

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