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More Americans than Projected Filed Jobless Claims Last Week

Thursday, 19 Apr 2012 08:59 AM

April 19 (Bloomberg) -- More Americans than forecast filed applications for unemployment benefits last week, a sign the improvement in labor-market conditions may be stalling.

Jobless claims fell by 2,000 to 386,000 in the week ended April 14 from a revised 388,000 the prior period that was higher than initially estimated, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg News called for a drop to 370,000. Revisions to previous data have been larger than normal and the government is trying to determine the cause, a Labor Department spokesman said as the figures were released to the press.

The claims figures raise the possibility the payroll gains that have helped push unemployment down to a three-year low may cool, weighing on consumer spending. Federal Reserve officials, awaiting evidence of a more robust job market and economic growth, have said they’ll keep borrowing costs low through 2014.

“We really need job growth to accelerate,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “If the labor market shows fatigue, it will weigh on consumer sentiment and wages and spending.”

Estimates in the Bloomberg survey ranged from 350,000 to 390,000. The Labor Department revised the previous week’s figure up from 380,000. After being revised up to 370,000 from an initial estimate of 360,000, the week before that was revised back down to 362,000, today’s figures showed.

States are revising the figures more than usual and as of now there is no explanation for the changes, the Labor Department spokesman said. The repeated revisions may make it more difficult to determine the actual trend in claims.

Average Climbs

The four-week moving average, a less volatile measure than the weekly figures, rose to 374,750 last week from 369,250.

The number of people continuing to receive jobless benefits rose by 26,000 in the week ended April 7 to 3.3 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 20,000 to 3.2 million in the week ended March 31.

Fifty states and territories reported an increase in claims, while 3 reported a decrease. 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.

Survey Week

Last week included the 12th of the month, which coincides with the survey period the Labor Department’s monthly jobs report. The April data will be released on May 4.

Growth in jobs and incomes is driving purchases of so- called big-ticket items. Cars and light trucks sold at a 14.3 million annual rate in March, capping the strongest quarter in four years, according to Ward’s Automotive Group.

An improvement in auto sales in the first quarter is linked to job gains, according to Mark Fields, president of the Americas at Ford Motor Co.

“Bolstered by a recent strengthening in the economy and the improving employment situation, U.S. industry sales have surged in the early months of 2012,” Fields said in a conference presentation that was telecast on April 4.

Employers added 120,000 jobs in March, half as many as in February and the fewest in five months, according to payrolls figures released on April 6. The jobless rate fell to 8.2 percent from 8.3 percent the prior month.

Pianalto’s View

The payrolls report underscored the choppy nature of the expansion, Federal Reserve Bank of Cleveland President Sandra Pianalto said this week.

“Recent labor market data provide an example of the uneven pattern of economic activity,” Pianalto, a voting member on the policy-setting Federal Open Market Committee, said in an April 16 speech in Lexington, Kentucky. “Monthly ups and downs like these make it hard to confirm the underlying pace of job creation.”

Fed policy makers plan to meet April 24-25 to debate policy for an economy described as growing at a “modest to moderate” pace in the Fed’s Beige Book survey released this month.

Companies trimming their workforce include Cracker Barrel Old Country Store Inc., which runs country store-themed restaurants. The company said on April 17 that it has cut 20 positions to reduce costs, and severance and other charges may decrease third-quarter earnings by 5 cents a share.

--With assistance from Chris Middleton in Washington. Editor: Carlos Torres

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

© Copyright 2017 Bloomberg News. All rights reserved.

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