Jobless claims drop, factories post rebound
By Jason Lange | November 22, 2012 1:28 AM EST
The number of Americans filing new claims for jobless benefits fell last week but remained elevated due to superstorm Sandy, a sign the storm is proving to be a substantial disruption to the labor market.
Other data on Wednesday showed stronger growth in U.S. manufacturing in November.
Initial claims for state unemployment benefits dropped 41,000 to a seasonally adjusted 410,000, the Labor Department said. That was smack in line with the median forecast in a Reuters poll.
The storm has distorted a range of economic indicators, making it harder to gauge the underlying health of the U.S. economy. Economists thought Wednesday's readings nevertheless point to a struggling jobs market.
"There appears to be a noticeable deceleration of growth in the fourth quarter," said Peter Hooper, an economist at Deutsche Bank in New York. "It would not be surprising if some of the new jobless claims are due to underlying weakness in the labor market," he said.
U.S. financial markets showed little reaction to the jobless data as investors focused on developments in Europe and trading slowed ahead of the Thanksgiving holiday on Thursday. U.S. stock futures were up slightly, while Treasury debt prices were flat.
An analyst from the Labor Department said several states were still reporting an increase in claims due to Sandy, a mammoth storm that slammed into the East Coast on October 29.
The storm left millions of homes and businesses without electricity, shut down public transportation and led many factories in the Mid-Atlantic and Northeast to curtail production. Retail sales fell as Sandy slammed the brakes on automobile purchases last month.
The data covers the same week when the department collects data for its estimate on hiring during the month, and gives some reason to expect softness in that report due on December 7, although not all analysts expect a significant impact. Nonfarm payrolls grew 171,000 in October.
"We are expecting things to be in the neighborhood of what we have seen, maybe with a pullback in light of the hurricane," said Bricklin Dwyer, an economist at BNP Paribas in New York.
The drop in new claims only partially unwinds the 90,000-claim increase registered the prior week. The Labor Department revised upward its estimate for new claims in the week ending Nov 10 to 451,000. Millan Mulraine, an economist with TD Securities in New York, said the storm would continue to distort claims for another few weeks.
However, most analysts think the economic impact of the storm is likely to be temporary.
Growth in the U.S. economy has looked uneven in recent months, with business investment sagging due to fears that Congress will slash the budget deficit next year, while consumer spending and the housing market have looked more robust.
A separate report showed U.S. manufacturing grew in November at its quickest pace in five months, bolstered by a rise in domestic demand.
Financial information firm Markit said its U.S. "flash," or preliminary, manufacturing Purchasing Managers Index rose to 52.4 from a three-year low of 51.0 in October. A reading above 50 indicates expansion.
Output in the sector and domestic new orders also grew at their fastest pace since June, while the pace of hiring in the factory sector was the swiftest in four months.
Some respondents said efforts to rebuild after Hurricane Sandy may have accounted for some of the increased demand.
Another report showed applications for U.S. home mortgages eased last week as interest rates edged up, though demand for new loans improved.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 2.2 percent in the week ended Nov 16.
The MBA's seasonally adjusted index of refinancing applications fell 3.2 percent. But the gauge of loan requests for home purchases, a leading indicator of home sales, rose for the second week in a row, gaining 2.7 percent.
(Additional reporting by Ellen Freilich and Richard Leong in New York; Editing by Andrea Ricci)
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Russia Is Ready for Shooting War, Will Likely Win Looming Nuclear Showdown with U.S. – Report
- Kobani ISIS Fighter Sends Out Desperate Message For Prayers And Support: Euphoria Turns Into Desperation As Kurds Advance
- Home Depot Early Black Friday 2014 Sale Up To Nov. 29, 2014 Includes Special Buys On Appliances Such As Samsung Refrigerators, Whirlpool Electric Ranges And Hoover Vacuum Cleaners
- Microsoft Band Runs Out Of Stock, But Offers $10 Gift Voucher To Wait-Listed Customers
- Google Joins Forces with GoPro Inc with New Google Maps Focusing on Destination
- Target Early Black Friday 2014 Sale Ad Released For Nov. 26, 2014 Includes Deals On Toys, HDTVs And Video Games Such As ‘FIFA 15’ And ‘NHL 15’ For Xbox 360 [WATCH VIDEO]
- 16GB iPhone 6 for $99 at Sam’s Club is the Best 2014 Black Friday Deal Around