The number of Americans filing for first-time jobless benefits dropped more than expected last week, according to the weekly report from the Labor Department on Wednesday, signaling that the nation’s labor market continues to strengthen after elevated figures due to the 16-day partial government shutdown in October. The report came a day early because of the Thanksgiving holiday tomorrow.
The agency said that initial jobless claims, a rough gauge of weekly layoffs, declined by 10,000 to 316,000 in the week ended November 23 from an upwardly revised 326,000 (from 323,000) the week prior. It was the lowest figure in two months. Economists missed the mark, predicting claims to rise to 333,000 last week.
The four-week moving average, a less volatile measure of the jobs market, decreased by 7,500 to 331,750. Generally speaking, economists consider claims under 350,000 as a sign of modest growth in the labor market. Claims had been escalated in recent weeks due to the government shutdown and glitches in a computer system upgrade in California that skewed the figures, but have now begun to normalize.
Throughout 2013, companies have remained relatively resilient at keeping staff levels consistent, but have not increased hiring in the face of economic uncertainty. This has held the unemployment rate over 7 percent, even though the participation rate (people actively looking for a job) sits at 35-year lows.
Continuing claims, or the number of people already receiving state benefits, dropped by 91,000 to 2.776 million in the week ended November 16. Continuing claims are reported at a one-week lag to initial claims.
Total claims, or those people collecting benefits from all state and federal plans, rose by 38,437 to 3.914 million in the week ended November 9. Total claims come at a two-week lag. At the same time in 2012, the total number of claims beneficiaries was 5.184 million.
The largest increases in initial claims for the week ending November 16 were in Florida (+888), Idaho (+573) and Mississippi (+534). The largest decreases were in California (-4,644), Michigan (-3,342) and Pennsylvania (-3,112).
With the possibility of the Federal Reserve starting to taper its practice of purchasing $85 billion worth of Treasuries and mortgage-backed securities each month, traders are attentive to economic data, especially that surrounding jobs. The Fed recently said that it could begin scaling-back its purchases even if the unemployment rate still isn’t at the target below 7 percent that it had originally targeted. With the encouraging report today, the markets have edged higher in early trading, reading the report as a sign that perhaps the economy can hold its own, even without the massive easing package of the main bank. The Fed meets again on December 17 and 18.
The Dow Jones Industrial Average is up by 5 points, the S&P 500 is ahead 3 points and the Nasdaq has gained 10 points shortly after the opening bell.
