Filings by jobless fall more than forecast; continuing claims up

Friday, December 27, 2013

WASHINGTON - Fewer Americans than projected filed applications for unemployment benefits last week, an indication the labor market is improving, economists said.

Unemployment claims fell by 42,000 to 338,000 in the week ending Dec. 21, a Labor Department report said Thursday. The median forecast of 42 economists surveyed by Bloomberg called for a drop to 345,000. Continuing claims rose.

The year-end holidays make it difficult to adjust for fluctuations in applications for jobless benefits, a Labor Department official said as the figures were released. Other data show a pickup in employment is helping increase personal spending, which accounts for almost 70 percent of the economy.

“Companies have been holding on to workers and are now a getting a bit more active on hiring,” said Omair Sharif, an economist at RBS Securities Inc. in Stamford, Conn., who projected 340,000 claims.

Economists’ estimates in the Bloomberg survey ranged from claims of 310,000 to 365,000. In the prior week, claims rose to a revised 380,000 from a previously reported 379,000.

The jobless-claims report showed that the four-week moving average, a less volatile measure than the weekly figures, rose to 348,000 last week from 343,750.

The number of people continuing to receive unemployment benefits increased by 46,000 to 2.92 million in the week ending Dec. 14, the highest since August. The continuing-claims figure does not include the number of Americans receiving extended benefits under federal programs.

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 40,700 to 1.33 million in the week ending Dec. 7.

Thirty-five states and territories reported a decline in claims, while 18 reported an increase. These data are reported with a one-week lag.

Initial unemployment claims reflect weekly firings and typically wane before job growth can accelerate.

Employment at U.S. passenger airlines is showing signs of stabilizing, according to the Transportation Department’s Bureau of Transportation Statistics, spurring more competition for jobs. Southwest Airlines Co., which last hired flight attendants from outside the company in 2011, received applications at a rate of 80 a minute, amassing 10,000 resumes for 750 openings.

“It was the first time we did that in a while, and, of course, anytime we do it, it’s like opening up the floodgates,” Chief Executive Officer Gary Kelly told employees in a weekly recorded message.

U.S. payrolls expanded by 203,000 workers in November after a 200,000 gain in October, and the unemployment rate fell to a five- year low of 7 percent, according to Labor Department figures.

The national unemployment rate remains above the 5 percent to 6 percent rate that would signal a normal job market. And long-term unemployment remains a big blot on the economy’s performance: Nearly 4.1 million Americans have been unemployed for six months or more.

The improvement in the economy and job market helps explain why the Federal Reserve decided to begin reducing stimulus. The central bank on Dec. 18 said it will trim monthly bond purchases to $75 billion from $85 billion starting in January.

Fed officials also raised their assessment of the outlook for the job market, predicting the unemployment rate will fall as low as 6.3 percent by the end of next year, compared with a September projection of 6.4 percent to 6.8 percent.

Business, Pages 23 on 12/27/2013