Initial Jobless Claims Fall as Hurricane Sandy Effects Dissipate

The Labor Department said that Thursday that the number of Americans filing for first time jobless benefits fell by 25,000 to a seasonally adjusted 370,000 for the week ended December 1.  It was the third straight week of declines after Hurricane Sandy slammed the East Coast on October 29.

Economists were expecting initial claims to tally 380,000.

Meanwhile, claims from two weeks ago were upwardly revised from 393,000 to 395,000.

Continuing claims, those received by people already collecting benefits, dropped 100,000 to 3.2 million for the week ended November 24.  Continuing claims are reported at a two-week lag and do not include those that have exhausted state benefits, but are still receiving aid from federal programs.

The four-week moving average, regarded as a better proxy of the jobs’ market trend because it eliminates some volatility, rose from 405,750 the week prior to 405,750.  In coming weeks, the spike in claims from Hurricane Sandy will be absorbed in that figure as well as it still remains high from the surge in claims in the Northeast.

The weekly claims figures are almost back down to pre-Sandy levels as the impact of the superstorm fades.  Claims in New Jersey and New York, the two hardest-hit states by Sandy, dropped by about 24,000 and 6,700, respectively, in the latest report from Washington.

The effects of the storm are likely to be strong on the jobs report coming from Washington on Friday at 8:30 AM ET.  Thousand of people lost their jobs and millions were without power for days due to the damage brought about by the biggest Atlantic storm to ever hit the United States.

Economists are predicting nonfarm payrolls to post gains of only 93,000 in November versus the 171,000 new jobs in October, representing the lowest monthly gain in five months.

The effects of the storm, coupled with the impasse on Capitol Hill to find an agreement to avert the so-called “fiscal cliff” in three weeks, is weighing on the labor market and making it difficult to get an accurate reading from the jobs data.  It could be January before a truer barometer is received.