Initial Jobless Claims Drop, but Still Feel Impact of Sandy

Andrew Klips |

nyse, wall street, economy, stock marketThe Labor Department reported on Wednesday that first-time applications for state unemployment benefits dropped by 41,000 to 410,000 for the week ended November 17. Normally initial jobless claims are reported from Washington on Thursday, but the report was moved forward one day because of the Thanksgiving holiday this week. The rate still remains high due to the number of people who are out of work because of Hurricane Sandy coming ashore on October 29. About 80 percent of the increased number of claims was from residents of New York and New Jersey. Economists’ predictions varied between 365,000 to 500,000 with a consensus of a drop of 18,000 to 418,000.

Meanwhile, initial jobless claims from the week prior were upwardly revised to 451,000 versus the original estimate of an increase of 78,000 to 439,000, making it the largest weekly jump since Hurricane Katrina blasted the Gulf Coast in 2005.

The one-month moving average, generally regarded as a better proxy of labor trends because it eliminates volatility, rose 9,500 to 396,250.

The “numbers are still distorted by Hurricane Sandy,” said a Labor Department official as some states are still filing excess claims because of the superstorm. It is expected that the figures will continue to be high for several more weeks due to Sandy based upon precedents set after Katrina.

The number of people continuing to receive jobless benefits declined by 30,000 to 3.34 million for the week ended November 10. Continuing claims are reported with a one-week lag. These figures do not tabulate people that have exhausted benefits at state levels (generally 26 weeks of benefits) and have moved-on to extended benefits from the federal government. The number of people receiving extended benefits are reported at a two-week lag and rose by 62,000 to 2.19 million for the week ended November 3.

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