Updated November 27 at 12:27am

Jobless claims in U.S. drop as auto factories come back on line

Fewer Americans than forecast filed applications for unemployment benefits as the effects of auto- plant shutdowns began to ebb.

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Jobless claims in U.S. drop as auto factories come back on line


WASHINGTON - Fewer Americans than forecast filed applications for unemployment benefits as the effects of auto- plant shutdowns began to ebb.

Jobless claims dropped by 24,000 to 334,000 in the week ended July 13, the fewest since early May, from a revised 358,000 the prior period, Labor Department figures showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg projected 345,000. The recent swings reflect the difficulty in adjusting the data for the timing of annual retooling shutdowns at automakers, a spokesman said as the figures were released to the press.

The slowdown in firing must be sustained to lay the groundwork for a pickup in hiring as the effects of a higher payroll tax wane. Bigger job gains will help propel income growth and underpin household spending, the biggest part of the economy.

“The labor market keeps improving,” Robert Stein, a senior economist at First Trust Portfolios LP in Wheaton Illinois, said before the report. “We’re seeing more jobs, we’re seeing more hours, and we’re seeing higher wages. The broader economy is growing still. Firms have been growing in their confidence.”

Economists’ claims estimates in the Bloomberg survey ranged from 319,000 to 360,000 after an initially reported 360,000 the previous week.

No states estimated jobless claims last week, the Labor Department spokesman said.

Average falls

The four-week moving average, a less volatile measure than the weekly figures, fell to 346,000 last week from 351,250.

The number of people continuing to receive jobless benefits climbed by 91,000 to 3.11 million in the week ended July 6, the most in five months. That caused the unemployment rate among people eligible for benefits to rise to 2.4 percent, the highest since early April, from 2.3 percent.

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 fell by about 24,200 to 1.64 million in the week ended June 29.

Thirty-two states and territories reported an increase in claims, while 21 reported a decrease. These data are reported with a one-week lag.

Auto plants typically shut down to retool for the new model year, often playing havoc with the claims data in July. Michigan, Pennsylvania and Ohio were among the states reporting the biggest jump in claims two weeks ago, and all cited dismissals at manufacturing plants.

Auto retooling

Ford Motor Co. said it will idle most of its North American assembly plants for one week this summer instead of two, to increase output. Three of Chrysler Group LLC’s assembly plants and all except one of its engine, transmission and stamping factories will skip a summer shutdown this year. Since its 2009 bankruptcy, General Motors Co. hasn’t had a formal summer shutdown, Mark Reuss, president of the company’s North American operations, told reporters in May.

Initial jobless claims reflect weekly firings and typically wane before job growth climbs.

Payrolls rose by 195,000 workers for a second month in June, indicating the U.S. is poised for faster growth as it shakes off the impact of fiscal policies that reigned in growth earlier in the year. The jobless rate stayed at 7.6 percent, close to a four-year low.

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