Monday, December 10, 2018
Text size

More Americans Than Forecast File Unemployment Claims

More Americans than forecast filed applications for unemployment benefits last week, a sign that the labor market is making progress in fits and starts.

Jobless claims in the week ended Nov. 9 declined 2,000 to 339,000 from a revised 341,000 the week before that was higher than initially reported, the Labor Department said today in Washington. The median forecast of 51 economists surveyed by Bloomberg called for a drop to 330,000. Applications for five states were estimated because of the Veterans Day holiday-shortened week, the Labor Department said.

Companies, already running lean after the recession, are trying to determine the optimum level for their workforces as political gridlock in Washington prevents lawmakers from reaching a compromise for this fiscal year's budget. A pick-up in consumer spending, which accounts for about 70 percent of the economy, is needed to help drive growth and boost hiring in the fourth quarter.

"Until we get beyond these political and fiscal uncertainties, we're likely to see this stop-and-start that we've had in the labor market," said Millan Mulraine, director of U.S. rates research at TD Securities USA LLC in New York, who predicted jobless claims would rise to 340,000. "Once we get beyond these issues, the labor market is likely to reflect a more buoyant economy."

Economists' estimates in the Bloomberg survey ranged from 325,000 to 350,000. The prior week's claims were revised from an initial reading of 336,000.

Other reports to showed worker productivity grew less than forecast in the third quarter and the trade deficit climbed more than projected in September.
More Productive

The measure of employee output per hour increased at a 1.9 percent annualized rate, after a revised 1.8 percent pace in the prior three months that was lower than last estimated, a Labor Department report showed. The median forecast in a Bloomberg survey of 59 economists called for a 2.2 percent gain. Expenses per worker dropped at a 0.6 percent rate.

The gap between exports and imports increased 8 percent to $41.8 billion, a four-month high, from $38.7 billion in August, the Commerce Department reported. The median forecast in a Bloomberg survey of 72 economists called for a $39 billion deficit.

Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor's 500 Index maturing in December climbed 0.1 percent to 1,781 at 8:47 a.m. in New York after Janet Yellen, President Barack Obama's nominee to head the Federal Reserve, signaled she plans to continue the central bank's monetary stimulus.

In testimony prepared for her nomination hearing before the Senate Banking Committee today, Yellen, the Fed's vice chairman, voiced her commitment to using bond purchases known as quantitative easing to boost growth and lower unemployment that remains above 7 percent more than four years after the economy began to recover from the deepest recession since the Great Depression.
Elevated Average

The four-week average of claims, a less-volatile measure, decreased to 344,000 last week from 349,750 the prior week. The reading compares with an average 328,750 at the end of August, before delays in processing claims in California caused the numbers to see saw.

California was among states and territories for which claims were estimated last week. The others were Virginia, Hawaii, Washington and Puerto Rico.

The number of people continuing to receive jobless benefits was unchanged at 2.87 million in the week ended Nov. 2.

Continuing claims don't include Americans who have exhausted their traditional state aid and are receiving emergency and extended benefits under federal programs. Those job seekers decreased by about 37,000 to 1.33 million in the week ended Oct. 26.

The unemployment rate among people eligible for benefits held at 2.2 percent in the week of Nov. 2, where its been since mid-September.
State Breakdown

Thirty-three states and territories reported an increase in claims, while 20 reported a decrease. These data are reported with a one-week lag.

Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate. Federal Reserve policy makers are waiting to see more evidence the economy will continue to improve before they trim $85 billion in monthly purchases of Treasury and mortgage debt.

A report last week showed American employers added 204,000 workers to payrolls in October even as gridlock over the budget in Washington forced the partial closing of federal agencies, topping the most optimistic forecast in a survey of economists.

Retailers are among those hiring as they gear up for their busiest season of the year. Retail employment grew by 44,400 in October, the most since June, according to the Labor Department.

Still, not all companies are in position to take on more workers. Kellogg Co. (K), the maker of Corn Flakes and Rice Krispies, said this month it will cut 7 percent of its global workforce, or about 2,000 jobs, as part of a four-year cost-saving plan amid a persistent slowdown in breakfast items and snacks.

To contact the reporter on this story: Victoria Stilwell in Washington at This email address is being protected from spambots. You need JavaScript enabled to view it.

To contact the editor responsible for this story: Christopher Wellisz at This email address is being protected from spambots. You need JavaScript enabled to view it.

Add comment

Security code

Pick a Market

Login to the Contributor Network