US first time unemployment claims drop

An auction sign for a property is seen at the front garden of a foreclosed house in Miami Gardens, Florida in this September 15, 2009 file photo. There are more than 6,600 home foreclosure filings per day, according to the Center for Responsible Lending, a nonpartisan watchdog group based in Durham, North Carolina. With nearly two million already this year, the flood of foreclosures shows no sign of abating any time soon. To match feature USA-HOUSING/FORECLOSURES REUTERS

The number of Americans filing first-time claims for unemployment benefits fell last week to the lowest since January, a sign the labor market is deteriorating more slowly as the economy emerges from the recession.

Applications fell by 33,000 to 521,000, lower than forecast, in the week ended Oct. 3, from a revised 554,000 the week before, Labor Department data showed today in Washington. The total number of people collecting unemployment insurance dropped in the prior week to the least since March.

While the figures indicate improvement, government data last week showed more job cuts than forecast for September and a rising jobless rate. President Barack Obama pledged to “explore any and all additional measures” to spur growth, as last week’s report underscored that gains in consumer spending may be hard to sustain once stimulus programs expire.

Economists forecast weekly claims would drop to 540,000 from a previously reported 551,000, according to the median of 45 projections in a Bloomberg News survey. Estimates ranged from 530,000 to 560,000.

Continuing claims dropped by 72,000 to 6.04 million in the week ended Sept. 26 from 6.11 million in the prior week.

The report showed the four-week moving average of initial applications, a less volatile measure, fell to 539,750 last week from 548,750.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, decreased to 4.5% in the week ended Sept. 26, from 4.6% the prior week.

Twenty-seven states and territories reported a decrease in claims, while 26 reported an increase. These data are reported with a one-week lag.

Initial jobless claims reflect weekly firings and tend to rise as job growth — measured by the monthly non-farm payrolls report — slows.

The Labor Department said last week that employers cut 263,000 jobs in September after a 201,000 drop in August, while unemployment climbed to 9.8%, the highest level since 1983. The US has lost 7.2 million jobs since the recession began in December 2007.

The government also projected that payrolls may have fallen by 824,000 more than previously thought in the year ended March.

Nonetheless, economists surveyed by Bloomberg in September estimated the US returned to growth last quarter after contracting in the first six months.

Companies looking to add staff include Richfield, Minnesota-based Best Buy Co. The world’s largest electronics retailer last month said it plans to hire more seasonal holiday workers this year to help meet demand for Internet-connected flat-panel televisions and mobile phones.

Those cutting jobs include Windstream Corp., a Little Rock, Arkansas-based fixed-line phone company, which said last week it plans to trim about 350 positions, or 4.9% of its workforce, by the end of the year. The cuts are needed as the company changes its business model, Chief Executive Officer Jeff Gardner said in a Sept. 30 statement.

Legislation to extend unemployment benefits is being delayed in the US Senate by a dispute among lawmakers over which states ought to receive the relief.

The House approved legislation last week that would extend benefits by 13 weeks for people in 27 states with jobless rates of at least 8.5% in August. Democrats had said they wanted to forward the bill to Obama by the end of September, when benefits ran out for about 400,000 Americans.

Seventeen senators objected to the House plan because their states would be excluded.

Article from: www.businessday.co.za