It News: U.S. Jobless Claims Unexpectedly Fall As Labor Market Mends

U.S. Jobless Claims Unexpectedly Fall As Labor Market Mends

By Michelle Jamrisko and Alex Kowalski - Aug 9, 2012

Jobless Claims in U.S. Unexpectedly Fall as Labor Market Mends

Fewer Americans filed applications for unemployment benefits last week, a sign the labor market may keep improving after employment picked up in July.
Jobless claims unexpectedly dropped by 6,000 to 361,000 in the week ended Aug. 4, Labor Department figures showed today in Washington. The median forecast of 43 economists surveyed by Bloomberg News called for an increase to 370,000. A spokesman for the agency said there was nothing unusual in the data.
Fewer firings mean employers are seeing enough demand to retain staff, indicating the world’s largest economy is sustaining the recovery from the recession. Labor Department data last week showed payrolls rose more than forecast in July.

“The labor market is slowly but steadily improving despite all the uncertainty created by the European financial problems, the election and the fiscal cliff,” Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania, said before the report. “There is no reason to think that job payroll increase posted in July cannot be duplicated in the months to come.”
Stock-index futures trimmed losses after the figures. The contract on the Standard & Poor’s 500 Index expiring in September dropped 0.1 percent to 1,396.9 at 8:33 a.m. in New York, after falling as much as 0.3 percent.
Estimates in the Bloomberg survey ranged from 359,000 to 385,000. The Labor Department revised the previous week’s figure up to 367,000 from an initially reported 365,000.
A Labor Department spokesman said last week that today’s data should be clear of any influence from the annual auto plant retooling closures that make it difficult to adjust the data for seasonal variations.
Trade Deficit
Another report today showed the trade deficit in the U.S. shrank in June as imports dropped and exports climbed.
The four-week moving average for jobless claims, a less volatile measure than the weekly figures, rose to 368,250 last week from 366,000.
The employment report for July showed employers added 163,000 workers last month, the biggest gain since February, according to the Labor Department’s so-called establishment survey released last week. A separate poll of households showed the jobless rate climbed to a five-month high of 8.3 percent.
Unemployment has been above 8 percent since February 2009 - - the longest stretch in the post-World War II era.

Today’s report showed the number of people continuing to receive jobless benefits climbed by 53,000 in the week ended July 28 to 3.33 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 127,000 to 2.42 million in the week ended July 21.
The unemployment rate among people eligible for benefits held at 2.6 percent, today’s report showed.
Forty-one states and territories reported a decline in claims, while 11 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.
LinkedIn Corp. (LNKD) of Mountain View, California, the biggest professional-networking website, is showing an uptick in activity among job-seeking customers.
“We’re about two times where we were last year in terms of hiring happening through the LinkedIn products within our customers,” Chief Financial Officer Steven Sordello said on an Aug. 2 earnings call. “Given European weakness where job growth has been slower, that rate is even higher.”
Cutting Staff
Cisco Systems Inc. (CSCO) is among companies announcing job cuts. The biggest maker of computer-networking equipment plans to eliminate about 1,300 jobs, or 2 percent of the workforce, as Europe’s debt crisis and sluggish corporate spending threaten sales.
Fed officials, at the conclusion of a two-day meeting last week, left unchanged their statement that economic conditions would likely warrant holding the benchmark interest rate target near zero at least through late 2014.
The Federal Open Market Committee “will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability,” it said in a statement. The group “expects economic growth to remain moderate over coming quarters and then to pick up very gradually.”