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Jobless claims rise, but trend shows improvement
Question of the Day
WASHINGTON (AP) — More Americans applied for unemployment benefits last week, but the broader trend in layoffs points to a slowly healing job market. The average over the past month fell to a two-year low.
New claims for unemployment aid rose last week by a seasonally adjusted 26,000 to 436,000, the Labor Department said Thursday. The previous week’s claims were revised up slightly to show applications had tumbled by 31,000 to 410,000. The figures are often volatile during the weeks around the Veterans Day and Thanksgiving holidays.
Even so, the longer-term trend has shown a downward drift.
The four-week moving average of claims, which smooths volatility, fell to 431,000 last week — a two-year low.
“After being little changed for most of the year, new jobless claims have broken to the downside in the last several weeks, suggesting that labor markets may actually be improving,” said Steven Wood, chief economist for Insight Economics.
Applications for jobless benefits need to stay below 425,000 for several weeks to signal robust hiring, economists say.
Claims peaked last year at 651,000 in March 2009. For most of this year, new claims largely fluctuated around 450,000. They have been below 450,000 in the last four weeks.
Recent signs suggest the economy is on track to end the year on a stronger note.
The latest evidence came Thursday with strong reports from retailers and on home sales:
• Stores reporting sales gains in November that topped Wall Street expectations included Costco Wholesale Corp., Target Corp., the owner of Victoria’s Secret and teen retailer Abercrombie & Fitch. Those reports boosted hopes that shoppers will spend more during the holiday season.
• The National Association of Realtors said the number of people who signed contracts to buy homes jumped in October, marking the third gain since contract signings hit a low in June. The association’s index of sales agreements for previously occupied homes rose 10.4 percent in October. Contract signings were up in every region of the country except the West.
And, earlier this week other economic reports showed that factories are pumping out goods, construction spending is up, and auto sales are rising.
Some economists are starting to raise their forecasts for job creation based on these developments. The government releases a new employment snapshot on Friday.
Some say employers will add about 180,000 jobs in November. Others, however, still are forecasting a gain of 145,000 jobs. Most think that the jobless rate will stay stuck at 9.6 percent.
The economy added 151,000 jobs in October, the first increase in total payrolls in five months. Private companies were responsible for all of the new jobs, but the increase in hiring still wasn’t strong enough to lower the unemployment rate.
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