Jobless claims in for a surprise

November 13, 2014 04:14 AM

Applications for U.S. unemployment benefits rose more than forecast last week, representing a pause from a recent run of readings close to a 14-year low.

Jobless claims increased by 12,000 to 290,000 in the week ended Nov. 8, the highest since Sept. 20, a Labor Department report showed today in Washington. The median forecast of 53 economists surveyed by Bloomberg called for 280,000. It was the ninth straight week claims have been less than 300,000.

Lines at state unemployment agencies have been shrinking this year as businesses hold the line on dismissals and take on more workers as sales advance. Better employment prospects have helped bolster consumer confidence and sustained spending as the holiday shopping season gets under way.

“The labor market is doing quite well,” said Tom Simons, an economist at Jefferies LLC in New York, who accurately projected the gain in claims. “It’s definitely beneficial for households. Better labor-market data and low gas prices should make for a good holiday season.”

No states estimated claims data last week and there was nothing unusual in the report, an agency spokesman said as the figures were released.

Economists’ forecasts in the Bloomberg survey ranged from 260,000 to 295,000.

Stock-index futures were little changed after the figures, with the contract on the Standard & Poor’s 500 Index (CME:SPZ14) rising less than 0.1% to 2,037 at 8:34 a.m. in New York.

The four-week moving average, a less volatile measure than the weekly figures, rose to 285,000 last week from 279,000.

Continuing Claims

The number of people continuing to receive jobless benefits climbed by 36,000 to 2.39 million in the week ended Nov. 1. The unemployment rate among people eligible for benefits held at 1.8%. The data are reported with a one-week lag.

Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate.

Employers added 214,000 workers to payrolls in October and the jobless rate fell to 5.8%, the lowest since July 2008, Labor Department figures showed on Nov. 7. Employment has climbed by at least 200,000 for nine consecutive months, putting the U.S. job market on track for its best showing in 15 years.

Citing “solid job gains and a lower unemployment rate,” Federal Reserve officials in October ended the central bank’s monthly asset purchases while maintaining their commitment to keep interest rates low for a considerable time.

Retailers are adding temporary positions to handle the year-end holiday rush. Macy’s Inc. in September announced plans to hire about 86,000 seasonal workers for its department stores, a 3.6% increase from a year ago.

Companies still trimming labor costs include American International Group Inc. The largest commercial insurer in the U.S. and Canada is closing an office in Georgia with 420 workers and moving some positions to other AIG sites, including one in Olathe, Kansas, a spokesman for the New York-based insurer said earlier this month.

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