Unemployment claims drop for 4th time in 5 weeks
WASHINGTON
The Labor Department said Thursday that initial claims for
jobless aid dropped by 11,000 to a seasonally adjusted 445,000.
It's the lowest level since the week ending July 10.
Stock futures rose after the report's release. Wall Street
analysts had expected a small increase.
Economists were mildly encouraged by the drop. But they also
pointed out that claims remain at an elevated level consistent with
weak job growth. Employers aren't hiring enough to bring down the
9.6 percent unemployment rate.
"While it's comforting to see claims grinding lower, the fact
is that they remain at levels that suggest continued sub-par job
growth," Sal Guatieri, an economist at BMO Capital Markets, wrote
in a note to clients.
Weekly applications have rarely fallen below 450,000 this year,
and never for longer than two weeks. Economists say a sustained
drop below 425,000 would signal employers are stepping up hiring.
The four-week average of new claims, a less volatile measure,
dropped to 455,750, the sixth straight decline.
Separately, retailers reported surprisingly strong sales gains
for September due to healthy back-to-school shopping. The results
raised hopes for a positive holiday shopping season.
Numerous chains reported better-than-expected results, including
Macy's Inc., Victoria's Secret and Bath and Body Works parent
Limited Brands Inc. and Abercrombie & Fitch.
The claims report, while volatile, is considered a real-time
snapshot of the job market. It is also a measure of the pace of
layoffs and an indication of companies' willingness to hire.
Claims have fallen sharply since June 2009, the month the
recession ended. They topped 600,000 at the end of that month.
But the improvement has largely stalled this year. Initial
claims have generally fluctuated around 450,000 since January. Any
sustained decline below that level would be a positive sign that
the job market is improving.
The report comes a day before the government is scheduled to
release its monthly jobs report for September. Private companies
are forecast to have added a net total of 75,000 jobs last month.
But that's likely to be offset by the loss of 75,000 temporary
census jobs. Overall, economists expect no change in total
payrolls, according to a survey by Thomson Reuters.
The unemployment rate is projected to rise to 9.7 percent from
9.6 percent, as more people enter the labor market searching for
work.
Total unemployment benefit rolls, meanwhile, dropped by 48,000
to 4.46 million, the Labor department said. That doesn't include
several million people who are receiving benefits under extended
programs approved by Congress during the recession.
The number of people on extended benefits rose by about 250,000
to 5.1 million in the week ending Sept. 18, the latest data
available. All told, about 8.9 million people received unemployment
aid that week.
Some companies are hiring despite the weak economy. Daryl
Dulaney, chief executive of Siemens Industry Inc., says his
company's parent, Siemens USA, has 1,200 job openings. About 40
percent require an engineering or information technology
background, and the company has had difficulty finding qualified
candidates, despite the high jobless rate, Dulaney said.