Posted on 08 Oct 2009
In a positive sign for the labor market, the number of U.S. workers filing new claims for jobless benefits decreased more than economists expected last week.
Total claims lasting more than one week, meanwhile, also declined.
Initial claims for jobless benefits fell by 33,000 to 521,000 in the week ended Oct. 3, the U.S. Labor Department said in its weekly report. The last time initial claims were this low was on January 3. The previous week's level was revised from 551,000 to 554,000.
Economists surveyed by Dow Jones Newswires had expected a decrease of only 11,000.
The four-week moving average of new claims, which aims to smooth volatility in the data, also fell by 9,000 to 539,750 from the previous week's revised figure of 548,750. The last time the four-week moving average was this low was on January 17.
Thursday's weekly claims figures come just one week after the Labor Department issued a grim report showing that U.S. employers eliminated more jobs than expected in the month of September and the unemployment level had surged to 9.8%. The report said that non-farm payrolls declined by 263,000 in September, with the largest job losses occurring in the construction, manufacturing, retail trade and government sectors. Economists surveyed by Dow Jones Newswires survey had expected a 175,000 decrease.
Despite the fact that initial claims fell last week by a larger amount than expected, they still remain at a fairly elevated level. The high level of claims coupled with the results in the September jobs report both appear to suggest that the labor market may take some time to heal.
Economists at J.P. Morgan Chase & Co. wrote in an economic analysis last week that claims generally appear to be on a downward trend, but the pace at which they are falling is a bit sluggish.
"The drop has been somewhat slow relative to other large recessions," the economists wrote last week. "Initial jobless claims have fallen 18% in the 26 weeks since they peaked. In the same time span, jobless claims fell by 23% after the 1975 recession, 33% after the 1980 recession, and 29% after the 1982 recession. Claims are usually a good predictor of employment, and the slowness of their decline could indicate a sluggish recovery in the labor market."
In the Labor Department's Thursday report, the number of continuing claims -- those drawn by workers for more than one week in the week ended Sept. 26 -- fell by 72,000 to 6,040,000 from the preceding week's revised level of 6,112,000. That represents the lowest figure since March 28.
The unemployment rate for workers with unemployment insurance for the week ended Sept. 26 also fell down to 4.5% -- a decrease of one percentage point from the prior week's unrevised rate of 4.6%.
The largest increases in initial claims for the week ending Sept. 26 were in California, Ohio, Illinois, Missouri and Tennessee. The largest decreases in initial claims were in New York, North Carolina, Arkansas and Florida.