Mostly not so ‘unexpectedly’ for readers of FedUpUSA.
By Timothy R. Homan
April 15 (Bloomberg) — The number of Americans filing claims for jobless benefits unexpectedly increased last week, indicating the improvement in the labor market will take time to unfold.
Initial jobless applications increased by 24,000 to 484,000 in the week ended April 10, the highest level since Feb. 20, Labor Department figures showed today in Washington. A Labor Department spokesman said the rise in claims was due more to administrative factors reflecting volatility around Easter than economic reasons.
Reluctance among some companies to hire is one of the challenges facing the economy as it recovers from the worst recession since the 1930s. Employment gains are needed to help spur consumer spending, which accounts for about 70 percent of the economy. “We’re not making rapid progress” in bringing down claims, Neal Soss, chief economist at Credit Suisse Holdings USA Inc. in New York, said in an interview with Bloomberg Radio, while also noting the holiday may have distorted the figures. “Job growth over the course of this year will be sufficient to bring the unemployment rate down.”
Economists forecast claims would fall to 440,000 from a previously reported 460,000 the prior week, according to the median of 44 projections in a Bloomberg News survey. Estimates ranged from 415,000 to 451,000.
Stock-index futures extended losses after the report. Futures on the Standard & Poor’s 500 Index dropped 0.2 percent to 1,204.50 at 9:01 a.m. in New York.
New York Manufacturing
A separate report showed manufacturing in the New York region rose more than anticipated in April. The Federal Reserve Bank of New York’s general economic index increased to 31.9 from 22.9 in March. Readings greater than zero signal growth.
The number of people receiving unemployment insurance increased, while those getting extended benefits also rose, today’s report showed.
The four-week moving average of initial claims, a less volatile measure than the weekly figures, increased to 457,750 last week, from 450,250.
The number of people continuing to receive jobless benefits increased 73,000 in the week ended April 3 to 4.64 million. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
The number of people who’ve used up their traditional benefits and are now collecting emergency and extended payments rose by 162,101 to 5.97 million in the week ended March 27.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, rose to 3.6 percent in the week ended April 3 from 3.5 percent.
Twenty-nine states and territories had an increase in claims for that same week, while 24 had a decrease.
In addition to Easter, a state holiday in California on March 31 likely played a part in last week’s rise in initial claims, the Labor Department spokesman said.
Payrolls rose by 162,000 in March, the biggest gain in three years, the Labor Department reported April 2. The unemployment rate was 9.7 percent for a third month and has not increased since reaching a 26-year high of 10.1 percent in October.
Federal Reserve Chairman Ben S. Bernanke said yesterday that the labor market will be slow to recoup the number of jobs lost since the recession began in December 2007.
“Consumer spending should be aided by a gradual pickup in jobs and earnings, the recovery in household wealth from recent lows, and some improvement in credit availability,” the Fed chairman said in prepared testimony to the Joint Economic Committee of Congress. Even so, “a significant amount of time will be required to restore the 8 1/2 million jobs that were lost during the past two years.”
In its Beige Book business survey released yesterday, the Fed said some employers are starting to add staff.
“While labor markets generally remained weak, some hiring activity was evident, particularly for temporary staff,” the central bank said. The report reflects information collected on or before April 5 across all Fed districts.
JPMorgan Chase & Co., the second-biggest U.S. bank by assets, is among companies saying they plan to add workers. Chief Executive Officer Jamie Dimon yesterday said in a statement that the New York-based firm expects to hire about 9,000 new employees in the U.S.
“There is clear and broad-based improvement in the economic factors in the United States and around the world,” Dimon, 54, told reporters on a conference call after the company announced that first-quarter earnings beat analysts’ estimates. “It appears to be strengthening, not weakening. It is possible that they will strengthen enough to end up with a strong recovery.”