WASHINGTON - Fewer Americans than forecast filed first-time claims for unemployment benefits last week, which may reflect difficulty adjusting the data for seasonal swings at the start of a new quarter.
Applications for jobless benefits dropped 30,000 to 339,000 in the week ended Oct. 6, the fewest since February 2008, Labor Department figures showed today. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. One state accounted for most of the plunge in claims, a Labor Department spokesman said as the data were issued to the press.
Waning dismissals may help clear the way for bigger hiring gains with any improvement in demand. At the same time, the global economy cooling and a lack of clarity on U.S. fiscal policy are hurdles for faster gains in employment.
“Job destruction is really not the problem,” Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Fla., said before the report. “It’s been the relatively weak pace of new hiring.”
Estimates for first-time claims ranged from 355,000 to 377,000 in the Bloomberg survey of 49 economists. The Labor Department revised the number of applications for the prior week up to 369,000 from a previously estimated 367,000.
Stock futures extended gains after the report. The contract on the Standard & Poor’s 500 Index maturing in December rose 0.5 percent to 1,433.50 at 8:37 a.m. in New York. The yield on the 10-year Treasury note climbed to 1.7 percent from 1.67 percent late yesterday.
Unadjusted claims typically surge at the start of a quarter as people receiving benefits reapply in order for the government to recertify their applications, the Labor Department spokesman said. The year’s increase was smaller than projected, because one large state showed a drop rather than an increase, the spokesman said. The breakdown by state will show up in next week’s report.
The U.S. trade deficit widened in August as exports dropped, a report from the Commerce Department also showed today. The gap grew 4.1 percent to $44.2 billion from $42.5 billion in July.
The four-week moving average for jobless claims, a less- volatile measure, fell to 364,000 from 375,500.
The number of people continuing to collect jobless benefits dropped by 15,000 to 3.27 million in the week ended Sept. 29. The continuing claims figure does not include the number of workers 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 23,000 to 2.14 million in the week ended Sept. 22.
The unemployment rate among people eligible for benefits held at 2.6 percent in the week ended Sept. 29. Twenty-eight states and territories reported an increase in claims, while 25 reported a decrease.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Labor market news was mixed last month, according to the most recent data on employment from the Labor Department. The jobless rate dropped to 7.8 percent in September, the first reading below 8 percent since January 2009. On the other hand, payrolls expanded by 114,000, the least since June.
Brighter job prospects may help President Barack Obama as the November elections draw nearer. With economic issues central to the race, the 0.3 percentage-point drop in unemployment aids the president’s case against Republican challenger Mitt Romney.
Businesses’ hiring and firing plans, nonetheless, could affect work opportunities in coming weeks. Cummins Inc., a maker of engines, said this week it expected to cut as many as 1,500 jobs by the end of 2012 as its outlook for revenue and profit worsened.
“We continued to see weak economic data in a number of regions during the third quarter, increasing the level of uncertainty regarding the direction of the global economy,” Chief Executive Officer Tom Linebarger said in an Oct. 9 statement. “As a result of the heightened uncertainty, end customers are delaying capital expenditures in a number of markets, lowering demand for our products.”
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