Jobless Claims Drop, but Data Skewed by Superstorm Sandy

Fewer Americans than anticipated filed for unemployment benefits in the week ended November 3, according to a Labor Department report Thursday morning.  Initial jobless claims, a measure of weekly firings, dipped by 8,000 to a seasonally-adjusted 355,000, although the data was skewed by the effects of Hurricane Sandy toppling the northeast U.S. early last week.  Economists at Bloomberg and Marketwatch were expecting claims to total 365,000 for the week.

Initial claims from two weeks prior were unchanged at 363,000.

The Labor Department noted that workers who lost their jobs due to the storm are now starting to apply for benefits and that another state that lost electricity had a reduced number of filings.  It could take three or four weeks for the storm to not affect the claims report as filings are completed and processed in heavy-hit states like New York, New Jersey and Connecticut. As such, claims could rise in coming weeks.

The four-week average, generally regarded as a better gauge of the trend of the jobs market because it smooths-out volatility, rose by 3,250 to 370,500. Continuing claims – those collected by people for more than a week – dropped by 135,000 to 3.13 million for the week ended October 27, representing the lowest level since July 2008.  Continuing claims are reported with a one-week lag.

A look at total claims, which are reported with a two-week lag, showed an increase of 41,864 to approximately 5.1 million people that received some sort of state or federal aid for the week ended October 20.

Last week, in its monthly report on the U.S. economic situation, the Labor Department said that 171,000 jobs were created during October.  The monthly figures were unaffected by Superstorm Sandy.  The unemployment rate edged upward to 7.9 percent from 7.8 percent in September, however, as more people were actively looking for work.

It’s been a relatively stagnant year for new job hiring.  Increases in total payrolls have averaged 157,000 per month, which is little better than the 153,000 for 2011 and just enough to pull the nation’s unemployment statistic nominally lower.