Tags: Jobless Claims Unexpectedly Drop To Three-Month Low

Jobless Claims Unexpectedly Drop To Three-Month Low

Thursday, 28 Oct 2010 08:39 AM

Applications for U.S. unemployment benefits unexpectedly fell last week to the lowest level in three months, a signal the labor market may be starting to mend.

Initial jobless claims decreased by 21,000 to 434,000 in the week ended Oct. 23, the lowest since early July, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance dropped to a two-year low, while those getting extended payments also fell.

Consumer spending, which accounts for about 70 percent of the economy, is beginning to gain speed and may give companies reason to increase payrolls heading into the holiday shopping season. Ford Motor Co. is among companies planning to add staff as sales improve.

“Job growth is modest right now, but it should improve,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, said before the report. “People will be surprised at how much better the labor market looks like in six months.”

The unadjusted data showed a 3 percent increase in claims in the week following the Columbus Day holiday period, smaller than the 7.9 percent rise that usually occurs, a Labor Department spokesman told reporters as the figures were being released. For that reason, the seasonally adjusted figure showed a decrease.

Economists forecast claims would increase to 455,000 from a previously reported 452,000 for the prior week, according to the median of 47 projections in a Bloomberg News survey. Estimates ranged from 430,000 to 464,000.

Average Drops

The four-week moving average of claims, a less volatile measure, fell to 453,250, also the lowest since July, from 458,750.

The number of people continuing to receive jobless benefits fell by 122,000 in the week ended Oct. 16 to 4.36 million, the fewest since November 2008.

The continuing claims figure does not include the number of Americans receiving extended and emergency benefits under federal programs. Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 414,100 to 4.66 million in the week ended Oct. 9.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.5 percent for a third week in the period ended Oct. 16.

More Declines

Eleven states and territories reported an increase in claims, while 42 reported a decline. These data are reported with a one-week lag.

Companies in September added 64,000 workers, while total payrolls that include government agencies fell a larger-than- forecast 95,000, Labor Department figures showed Oct. 8.

The economy is forefront in Americans’ minds as the Nov. 2 Congressional elections approach. Forty-three percent of respondents to a Gallup Inc. poll released this week rated economic conditions as the most important of four issues in considering in how they would vote.

Ford, the second-largest U.S. automaker, plans to invest $850 million and add 1,200 jobs in Michigan by 2013 as sales rebound, the company said Oct. 25. It will add 900 hourly positions in its factories and 300 salaried jobs at its engineering and manufacturing operations, it said.

Other companies are still paring staff. United Technologies Corp., the maker of Pratt & Whitney jet engines and Carrier air conditioners, plans to cut about 3,300 jobs as part of its cost- reduction efforts announced this year. It eliminated 1,300 positions in the first nine months of this year and is targeting the rest through 2011, it said in a quarterly filing with the U.S. Securities and Exchange Commission Oct. 25.

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Applications for U.S. unemployment benefits unexpectedly fell last week to the lowest level in three months, a signal the labor market may be starting to mend.Initial jobless claims decreased by 21,000 to 434,000 in the week ended Oct. 23, the lowest since early July, Labor...
Jobless Claims Unexpectedly Drop To Three-Month Low
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2010-39-28
 

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