The number of Americans collecting
unemployment benefits fell to the lowest since April and initial
jobless claims last week matched an eight-month low, suggesting
people are finding work as the economy strengthens.
Continuing claims declined 84,000 in the week ended Oct. 11
to 3.542 million, the lowest since April 5, the Labor Department
said in Washington. First-time filings dropped to 386,000 last
week from 390,000.
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The decline is the latest signal that U.S. employers may be
about resume hiring. Deutsche Bank Securities Inc. estimates the
economy may have added 125,000 jobs this month following
September’s 57,000 gain, the first back-to-back increases in a
year. Treasury Secretary John Snow said Monday he expects job
gains to accelerate to about 200,000 a month.
“We will be hiring workers as the volume increases,” Scott
Davis, chief financial officer of United Parcel Service In., the
world’s largest package-delivery company, said in a television
interview with Bloomberg News. “There has been some of that going
on, and I would anticipate more in later November into the holiday
season.”
Last week’s initial claims matched the number in the week
ended Sept. 20, which was the lowest since 378,000 during the
first week of February. Economists had forecast 385,000 new
claims, according to the median estimate in a Bloomberg survey.
The insured unemployment rate, which tends to move with the
monthly jobless rate, fell to 2.8 percent in the week before last
from 2.9 percent.
The fall “suggests that we could see the unemployment rate
drop from 6.1 percent to 6 percent” in October, said Joseph
LaVorgna, senior U.S. economist at Deutsche Bank Securities. The
Labor Department will release those employment statistics Nov. 7.
Benefit applications averaged 402,530 between July 1 and Oct. 11, down from 419,270 in the first half of the year and a peak of
459,000 during the week ended April 19. Some economists consider
400,000 the dividing point between labor market expansion and
contraction.
Weekly initial claims of 350,000 to 375,000 would be lead to
“moderate” growth in the monthly jobs data, according to Joshua
Shapiro, chief U.S. economist for Maria Fiorini Ramirez Inc.
“This is where we need to go in order to signal that the labor
market is indeed beginning to recover rather than just to
stabilize,” he said.
The percentage of unemployed U.S. workers who couldn’t find a
job before drawing their last benefit check fell in September, the
Labor Department said earlier this week. The so-called exhaustion
rate fell to 43.66 percent in September from 43.78 percent the
previous month.
Bloomberg News
