WASHINGTON (AP) — Applications for unemployment benefits fell last week for
the fourth time in five weeks, a sign that layoffs are declining.
The Labor Department said Thursday that initial claims for jobless aid dropped
by 11,000 to a seasonally adjusted 445,000. It’s the lowest level since the
week ending July 10.
Stock futures rose after the report’s release. Wall Street analysts had
expected a small increase.
Economists were mildly encouraged by the drop. But they also pointed out that
claims remain at an elevated level consistent with weak job growth. Employers
aren’t hiring enough to bring down the 9.6 percent unemployment rate.
“While it’s comforting to see claims grinding lower, the fact is that they
remain at levels that suggest continued sub-par job growth,” Sal Guatieri, an
economist at BMO Capital Markets, wrote in a note to clients.
Weekly applications have rarely fallen below 450,000 this year, and never for
longer than two weeks. Economists say a sustained drop below 425,000 would
signal employers are stepping up hiring.
The four-week average of new claims, a less volatile measure, dropped to
455,750, the sixth straight decline.
Separately, retailers reported surprisingly strong sales gains for September
due to healthy back-to-school shopping. The results raised hopes for a positive
holiday shopping season.
Numerous chains reported better-than-expected results, including Macy’s Inc.,
Victoria’s Secret and Bath and Body Works parent Limited Brands Inc. and
Abercrombie & Fitch.
The claims report, while volatile, is considered a real-time snapshot of the
job market. It is also a measure of the pace of layoffs and an indication of
companies’ willingness to hire.
Claims have fallen sharply since June 2009, the month the recession ended. They
topped 600,000 at the end of that month.
But the improvement has largely stalled this year. Initial claims have
generally fluctuated around 450,000 since January. Any sustained decline below
that level would be a positive sign that the job market is improving.
The report comes a day before the government is scheduled to release its
monthly jobs report for September. Private companies are forecast to have added
a net total of 75,000 jobs last month. But that’s likely to be offset by the
loss of 75,000 temporary census jobs. Overall, economists expect no change in
total payrolls, according to a survey by Thomson Reuters.