By Shobhana Chandra for Bloomberg – More Americans unexpectedly filed applications for unemployment benefits last week, indicating companies let go of seasonal workers following the holidays.
Jobless claims climbed by 19,000 to 316,000 in the week ended Jan. 10, the most since early September, from a revised 297,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for 290,000.
The first full week of the year is typically a time when holiday workers are dismissed and the increase in claims is a sign firings were higher than usual this year. The swings also make it difficult for the government to adjust the data, which means it will take a few weeks to determine if the number of applications has truly picked up.
“It happens at the beginning of every calendar quarter and the beginning of every year, so it’s difficult to seasonally adjust at this time,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who projected claims would jump to 325,000. “People are finding work. The labor market is fine.”
Another report today showed price pressures remain weak. The wholesale price index fell 0.3 percent in December, the biggest decrease in three years, after dropping 0.2 percent the prior month, according to Labor Department data. The median estimate in a Bloomberg survey called for a 0.4 percent decline. Over the past 12 months, producer prices rose 1.1 percent.
Also today, manufacturing in New York expanded more than projected in January. The Federal Reserve Bank of New York’s Empire State Index climbed to 10 from a revised minus 1.2 in December. Readings greater than zero signal growth.
Stock-index futures were little changed after the reports. The contract on the Standard & Poor’s 500 Index maturing in March rose less than 0.1 percent to 2,008.4 at 8:48 a.m. in New York.
No states estimated jobless claims last week and there was nothing unusual in the report, a Labor Department spokesman said as the figures were released.
Economists’ estimates in the Bloomberg survey ranged from claims of 287,000 to 330,000. The Labor Department revised the previous week’s figure from an initially reported 294,000.
The four-week moving average, a less volatile measure than the weekly figures, rose to 298,000 last week from 291,250.
The number of people continuing to receive jobless benefits dropped by 51,000 to 2.42 million in the week ended Jan. 3. The unemployment rate among people eligible for benefits declined to 1.8 percent from 1.9 percent. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically decline before job growth accelerates.
Payrolls climbed by 252,000 workers in December following a 353,000 rise the prior month, and the jobless rate dropped to 5.6 percent, the lowest level since June 2008, according to Labor Department figures released last week. About 3 million more Americans found work in 2014, the most in 15 years.
Stronger employment and cheaper gasoline are underpinning consumer spending, the biggest part of the economy, and helping the U.S. stand out in the global economy as many overseas markets struggle. Most economists are projecting purchases accelerated last quarter from the previous three months even as a report yesterday showed retail sales slumped at the end of the year.
Another sign of progress is the gain in job openings. The number of positions waiting to be filled rose to 4.97 million in November, the most since January 2001, figures showed this week. Dismissals, which exclude retirements and those who left their job voluntarily, fell. The quits rate, showing the willingness of workers to leave their jobs, held at 1.9 percent.
The gains are in sync with Federal Reserve policy makers’ assessment that the labor market is improving. Most regions saw “modest” or “moderate” economic growth, the Fed said yesterday in its Beige Book, based on reports from 12 districts gathered on or before Jan. 5.
“Payrolls in a variety of sectors expanded moderately” the central bank said. “Significant wage pressures were largely limited to workers with specialized technical skills.”
Better employment prospects mean Americans are getting more upbeat. The Conference Board’s consumer confidence data showed that in December, the share of consumers that said jobs were hard to get dropped to the lowest since March 2008, and the portion who said jobs were currently plentiful jumped to a four-month high.
Still, some businesses are reducing staff. J.C. Penney Co., a department-store chain, said it will close 40 stores this year and cut as many as 2,250 jobs as it continues its attempted turnaround.