Claims for employment benefits rise slightly
The number of people who applied for unemployment benefits rose slightly last week, only partially reversing a sharp decline two weeks ago, according to U.S. data released Thursday.
Initial jobless claims in the week ended Oct. 1 climbed by 6,000 to a seasonally adjusted 401,000, the Labor Department said.
The increase was smaller than expected. Economists surveyed by MarketWatch had expected applications to rise to 410,000.
Claims in the week ended Sept. 24 fell 33,000 to 395,000, revised from an initial estimate of a drop of 37,000.
Economists said the large decrease was caused by seasonal adjustment issues as well as the tailing off of hurricane-related activity.
A Labor Department official said that no special factors affected the latest data.
There used to be an old rule of thumb that claims above 400,000 signaled recession, but economist Michelle Girard said that it was no longer valid and that no alternative threshold had emerged.
Economists are watching claims closely because any sustained uptrend from current levels would be an early warning of renewed contraction in the economy, Girard, senior economist at RBS Securities Inc., said in a note to clients.
The average of new claims in the last four weeks, viewed as a more accurate gauge of employment trends, fell by 4,000 to 414,000, the lowest level since late August.
On Friday, the government will release the monthly employment report for September. Economists think the U.S. added a net 59,000 jobs to nonfarm payrolls after a flat reading in August.
Still, the economy remains weak, and hiring by historical standards is very slow at the current stage of recovery. The U.S. needs to add at least 125,000 jobs a month just to keep up with the growth of the labor force, and double that amount to drive down the nation’s unemployment rate, which stood at 9.1% for August.
The chance that hiring will sharply accelerate in the near future, however, appears low. Slower consumer spending, plunging stock markets and worries about excessive debt in the U.S. and Europe have spurred many companies to reevaluate hiring plans.
Federal Reserve Chairman Ben S. Bernanke said Tuesday that the recovery was close to faltering and that he didn’t see any hints of improvement in the labor market.
Bernanke also recently called the weak labor market a “national crisis.”
Robb writes for MarketWatch.com/McClatchy.
