December 2, 2010
By JEANNINE AVERSA, AP Economics Writer – 52 mins ago
WASHINGTON – More Americans applied for unemployment benefits last week, but the broader trend in layoffs points to a slowly healing job market. The average over the past month fell to a two-year low.
New claims for unemployment aid rose last week by a seasonally adjusted 26,000 to 436,000, the Labor Department said Thursday. The previous week’s claims were revised up slightly to show applications had tumbled by 31,000 to 410,000. The figures are often volatile during the weeks around the Veteran’s Day and Thanksgiving holidays.
Even so, the longer-term trend has shown a downward drift.
The four-week moving average of claims, which smooths volatility, fell to 431,000 last week. That’s a two-year low.
“After being little changed for most of the year, new jobless claims have broken to the downside in the last several weeks, suggesting that labor markets may actually be improving,” said Steven Wood, chief economist for Insight Economics.
Applications for jobless benefits need to stay below 425,000 for several weeks to signal robust hiring, economists say.
Claims peaked last year at 651,000 in March 2009. For most of this year, new claims largely fluctuated around 450,000. They have been below 450,000 in the last four weeks.
Recent signs suggest the economy is on track to end the year on a stronger note.
The latest evidence came Thursday with strong reports from retailers and on home sales:
• Stores reporting sales gains in November that topped Wall Street expectations included Costco Wholesale Corp., Target Corp., the owner of Victoria’s Secret and teen retailer Abercrombie & Fitch. That’s boosting hopes that shoppers will spend more during the holiday season.
• The National Association of Realtors said the number of people who signed contracts to buy homes jumped in October, marking the third gain since contract signings hit a low in June. The association’s index of sales agreements for previously occupied homes rose 10.4 percent in October. Contract signings were up in every region of the country except the West.
And, earlier this week other economic reports showed that factories are pumping out goods, construction spending is up and auto sales are rising.
Some economists are starting to raise their forecasts for job creation based on these developments. The government releases a new employment snapshot on Friday.
Some say employers will add around 180,000 jobs in November. Others, however, are still forecasting a gain of 145,000 jobs. Most think that the jobless rate will stay stuck at 9.6 percent.
The economy added 151,000 jobs in October, the first increase in total payrolls in five months. Private companies were responsible for all of the new jobs. But the increase in hiring still wasn’t strong enough to lower the unemployment rate.
The claims figures provide economists with important signals about the health of the job market. They are a measure of the level of layoffs and indicate whether companies are hiring.
Difficulties adjusting for the Thanksgiving holiday contributed to last week’s spike in new applications, a government analyst said. The unadjusted figures show new claims fell by 54,196 last week.
Thursday’s report also showed that the number of people continuing to collect unemployment aid rose to 4.3 million for the week ending Nov. 20. That doesn’t include millions of additional people on extended unemployment programs that were set up during the recession.
Overall, 8.9 million people are receiving jobless aid, including 4.9 million that are doing so through the federally funded extended benefit programs. Those provide up to 99 weeks of benefits.
However, the extended programs expired at the end of November. Nearly 2 million will lose unemployment benefits as the holiday arrives if Congress doesn’t change its mind and renew the aid.