By Shobhana Chandra - Jan 12, 2012 8:49 PM GMT+0700
More Americans than forecast filed applications for unemployment benefits last week, raising the possibility that a greater-than-usual increase in temporary holiday hiring boosted December payrolls.
Jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, Labor Department figures showed today in Washington. The median forecast of 46 economists in a Bloomberg News survey projected 375,000. The number of people on unemployment benefit rolls rose, while those receiving extended payments decreased.
Hiring by package delivery companies and retailers during the holidays to meet demand for gifts may now be giving way to an increase in dismissals. At the same time, claims figures are subject to greater volatility during this time of year, as the government has trouble adjusting the data for the seasonal swings in employment.
“There is usually a surge in seasonal layoffs at this time, and that is what’s happening here,” said Jonathan Basile, a senior economist at Credit Suisse in New York, who projected claims would jump to 405,000. “Claims have shown an improving trend. It’s a vote of confidence for continued improvement in the labor market.”
Retail sales in December rose less than forecast, restrained by cheaper fuel prices and holiday discounting that helped hold down the value of goods purchased, figures from the Commerce Department also showed today. The 0.1 percent gain followed a 0.4 percent advance in November that was more than initially reported.
Shares Trim Gains
Stock-index futures trimmed earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in March climbed 0.1 percent to 1,289.6 at 8:48 a.m. in New York. It had been up as much as 0.7 percent earlier.
Jobless claims were projected to increase from 372,000 initially reported for the prior week, according to the Bloomberg survey. Estimates ranged from 352,000 to 405,000. The Labor Department revised the previous week’s figure up to 375,000.
A Labor Department spokesman said there was nothing unusual in the data and no states or territories were estimated. The seasonal-adjustment projected a 12 percent increase in claims during the first week of January. Instead, unadjusted applications climbed by 19 percent, he said.
Seasonal Volatility
The week-to-week changes in claims may differ from economists’ forecasts as adjusting the data for seasonal variations is difficult around this time of the year, said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York.
“Seasonal volatility injects considerable uncertainty into projections of these data for another couple of weeks,” Shapiro said in a note this month.
The four-week moving average, a less volatile measure than the weekly figures, increased to 381,750 last week from 374,000.
The number of people continuing to receive jobless benefits rose by 19,000 in the week ended Dec. 31 to 3.63 million.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 48,500 to 3.45 million in the week ended Dec. 24.
Employers trying to trim costs include Archer Daniels Midland Co. The world’s largest grain processor plans to cut about 1,000 jobs, or 3 percent of its workforce, in part by offering voluntary retirement incentives and severance.
Cutting Jobs
“These actions will help us enhance our productivity and earnings power,” Patricia Woertz, chief executive officer of Decatur, Illinois-based ADM, said in a statement yesterday.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at to 2.9 percent, today’s report showed.
Twenty-six states and territories reported an increase in claims, while 27 reported a decrease. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Payrolls climbed by 200,000 workers in December after rising by 100,000 the prior month, and the jobless rate fell to 8.5 percent, the lowest level in almost three years, Labor Department figures showed on Jan. 6.
Seasonal Employment
About 40,000 of the increase in December payrolls represented a jump in hiring at courier and messenger services like FedEx Corp.
Employers created 1.64 million jobs in 2011, the best year for the American worker since 2006. Even with the gains, much needs to be done toward recovering the 8.75 million jobs lost as a result of the recession that ended in June 2009.
The economy “expanded at a modest to moderate pace” from late November through the end of December, while most industries saw “limited permanent hiring,” the Federal Reserve said in its Beige Book anecdotal business survey released yesterday. “The combination of limited permanent hiring in most sectors and numerous active job seekers has continued to keep a lid on general wage increases.”
Fed policy makers next meet on Jan. 24-25.
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
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