First-time filings for unemployment benefits dipped last week, but not as much as expected, according to the Labor Department’s weekly report, indicating the claims are edging higher following the 16-day partial government shutdown earlier this month.
For the week ending October 26, the Labor Department said that initial jobless claims, a gauge of weekly layoffs, decreased 10,000 to 340,000. The week prior’s figure of 350,000 was unrevised. Economists predicted claims would decline to 335,000.
The four-week moving average, a less volatile measure of jobless trends, rose by 8,000 to 348,250. The four-week average is climbing as a result of elevated claims in recent weeks as California, the nation’s most populous state, processes a backlog of claims that stacked-up as it dealt with system glitches from a computer upgrade in September. Claims also swelled from the government shutdown sending additional people to the unemployment office to collect temporary benefits.
By comparison, the one-month average was at 305,000 in the week before the government shutdown and computer debacle in California.
The Labor Department said that no claims in Thursday’s report were from previously filed claims in California. On that point, the less-than-expected drop in claims seems to signal that employers have let more staffers go lately and that the rise in recent reports was not simply because of temporary influences. In short, the wrangling in Washington, D.C. over Obamacare, the debt ceiling and a budget appear to be having more of an impact than first thought.
Continuing claims, or those people already receiving state benefits, edged up from 2.85 million the week prior to 2.881 million in the week ended October 19. Continuing claims are reported at a one-week lag to initial claims.
The total number of people receiving benefits in all state and federal programs for the week ended October 12 was 3.896 million, up from 3.857 million the week earlier. Total claims are reported at a two-week lag. At the same time in 2012, total claims were 5.035 million.
The largest increases in initial claims for the week ending October 19 were in Kentucky (+96), Maine (+49) and Delaware (+45). The largest decreases were in California (-13,033), Pennsylvania (-3,240) and Maryland (-3,222). 48 states and territories reported a decline in claims and five reported an increase.
The markets are added to losses from Wednesday, even though the report supports the Fed’s decision to maintain its large stimulus package going forward. Yesterday, the Federal Reserve committed to continue holding its key interest rate near zero at least until the unemployment rate reaches 6.5 percent. In September, the unemployment rate stood at 7.2 percent, largely because of the lowest participation rate in 35 years.
One hour into Thursday’s session, the Dow Jones Industrial Average is down 48 points, the S&P 500 is lower by 4 points and the Nasdaq is off 14 points.