WASHINGTON - The number of Americans filing for unemployment benefits unexpectedly increased to a two-month high last week. Swings in jobless applications are typical in July as auto plants close for annual retooling.
First-time claims rose by 16,000 to 360,000 in the week ended July 6 from a revised 344,000, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg called for a drop to 340,000. Claims are difficult to adjust in July for seasonal events such as vehicle plant shutdowns and the Independence Day holiday, a Labor Department spokesman said as the data were released.
Firings need to keep waning to lay the groundwork for a pickup in hiring once the effect of higher taxes and federal budget cutbacks fades in the second half of the year. Sustained job gains would help propel income growth and underpin household spending, the biggest part of the economy.
“July claims numbers get totally bounced around by the auto-plant shutdowns,” said Brian Jones, senior U.S. economist at Societe Generale in New York, who correctly forecast the level of claims. “The labor market is showing steady progress. The pace of hiring is good.”
Another report from the Labor Department showed import prices fell for a fourth straight month in June as costs declined for food, natural gas and motor vehicles.
Stock-index futures maintained gains after the figures, with the contract on the Standard & Poor’s 500 Index expiring in September rising 0.9 percent to 1,664.1 at 8:45 a.m. in New York.
Economists’ estimates in the Bloomberg survey ranged from claims of 315,000 to 380,000 after an initially reported 343,000 the previous week.
There was nothing unusual in the data for last week and no states estimated jobless claims, the Labor spokesman said.
The four-week moving average, a less volatile measure than the weekly figures, climbed to 351,750 last week from 345,750.
The number of people continuing to receive jobless benefits rose by 24,000 to 2.98 million in the week ended June 29. 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 22,700 to 1.65 million in the week ended June 22.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.3 percent in the week ended June 29, today’s report showed.
Thirty-three states and territories reported an increase in claims, while 20 reported a decline. These data are reported with a one-week lag.
Auto plants typically shut down to retool for the new model year, often playing havoc with the claims data in July.
“Claims could be in for a bumpy ride over the next couple weeks,” said Tom Simons, an economist at Jefferies LLC in New York. “Changes in production schedules in the auto sector could again cause some volatility in initial jobless claims, making the data difficult to interpret.”
Ford Motor Co. said it will idle most of its North American assembly plants for one week this summer instead of two, to increase output. Three of Chrysler Group LLC’s assembly plants and all except one of its engine, transmission and stamping factories will skip a summer shutdown this year. Since its 2009 bankruptcy, General Motors Co. hasn’t had a formal summer shutdown, Mark Reuss, president of the company’s North American operations, told reporters in May.
Join PBN and two panels of successful female executives, business owners and entrepreneurs as we delve into what women should do to advance their careers, and become leaders in the corporate world and their own enterprises.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.