Tags: Jobless | Claims | Decrease

Fewer People Apply for Unemployment Benefits in Sign Job Market Slowly Improving

Thursday, 23 Dec 2010 08:34 AM

Fewer Americans filed applications for jobless claims last week and the number of people on benefit rolls dropped to a two-year low, reinforcing evidence the labor market is improving.

Initial filings for unemployment insurance declined by 3,000 to 420,000 in the week ended Dec. 18, matching the median forecast in a Bloomberg News survey, Labor Department figures showed today in Washington. Those already collecting benefits fell in the previous week to 4.06 million.

Fewer firings may be an initial step toward the increased hiring that’s needed to spur consumer spending, which accounts for 70 percent of the economy. At the same time, Federal Reserve officials said economic growth is short of the pace needed to reduce an unemployment rate near 10 percent.

“We have a labor market that is gradually on the mend,” Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts, said before the report. “It’s still going to be a long haul.”

Estimates of initial claims in the Bloomberg survey of 45 economists ranged from 400,000 to 430,000. The Labor Department revised the prior week’s figure up to 423,000.

Today’s report corresponds to the week the Labor Department surveys businesses to calculate the monthly payroll figures. The next jobs report is due Jan. 7.

The four-week moving average, a less volatile measure than the weekly claims figures, rose to 426,000 last week from 423,500, today’s data showed.

The number of people continuing to receive jobless benefits declined by 103,000 in the week ended Dec. 11. They were forecast to fall to 4.1 million.

Extended Benefits

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 152,000 to 4.68 million in the week ended Dec. 4.

President Barack Obama on Dec. 17 signed into law an $858 billion bill extending for two years Bush-era tax cuts for all income levels. It also continues expanded jobless insurance benefits to the long-term unemployed for 13 months and reduces payroll taxes for workers by two percentage points during 2011.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.2 percent in the week ended Dec. 11, the lowest since Nov. 22, 2008, from 3.3 percent in the prior week, today’s report showed.

States and Territories

Forty-three states and territories reported a decline in claims, while 10 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. That relationship has broken down in recent months as some companies continue to cut staff while others expand, indicating an uneven rebound.

“The economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment,” Fed officials said in a statement after their policy meeting on Dec. 14.

Businesses that are adding workers include Motorola Inc., the Schaumburg, Illinois-based maker of mobile phones.

“We have been” hiring, co-Chief Executive Officer Greg Brown said in a Bloomberg Television interview on Dec. 15. Even so, “we need to create jobs faster.”

While the pace of firings has cooled in the last couple of months, some companies are still paring staff.

Sunnyvale, California-based Yahoo! Inc. owner of the largest U.S. Web portal, last week said it is cutting about 600 jobs, or 4 percent of its workforce, amid a turnaround effort.

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Fewer Americans filed applications for jobless claims last week and the number of people on benefit rolls dropped to a two-year low, reinforcing evidence the labor market is improving.Initial filings for unemployment insurance declined by 3,000 to 420,000 in the week ended...
Jobless,Claims,Decrease
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2010-34-23
Thursday, 23 Dec 2010 08:34 AM
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