Weekly US jobless claims hit 9-month high of 379K

Updated: Thursday, December 19 2013, 09:01 PM EST
Weekly US jobless claims hit 9-month high of 379K story image
WASHINGTON (AP) - The number of people seeking U.S. unemployment benefits rose 10,000 last week to a seasonally adjusted 379,000, the highest since March. The increase may reflect volatility around the Thanksgiving holidays.

The Labor Department said Thursday that the less volatile four-week average jumped 13,250 to 343,250, the second straight increase.

Applications are a proxy for layoffs. Last month, they fell to nearly the lowest level in six years, as companies cut fewer jobs. But two weeks ago, they surged 64,000 to 369,000.

Economists dismissed that spike, saying it likely reflected a Thanksgiving holiday that fell later in the month. That can distort the government's seasonal adjustments. But if the trend continues it would be a troubling sign of rising layoffs.

The number of people receiving benefits rose sharply. More than 4.4 million people received unemployment benefits in the week ended Nov. 30, the latest data available. That was 600,000 more than the previous week. Those figures aren't adjusted for seasonal patterns.

Still, most other recent job market data has been positive and economists generally expect unemployment benefits applications will soon fall back.

"We are inclined to ignore the recent claims data," said Joseph LaVorgna, an economist at Deutsche Bank. "We see little evidence to suggest that the labor market trend of the past few months has meaningfully changed."

Hiring has been healthy for the past four months. The economy added an average of 204,000 jobs a month from August through November, a solid improvement from earlier in the year. The unemployment rate fell in November to a five-year low of 7 percent.

The unemployment rate remains above the historic averages of 5 percent to 6 percent that are associated with strong job markets.

Federal Reserve Chairman Ben Bernanke said Wednesday that he expects the robust job gains to continue. Americans are spending more and the economy is less restrained by higher taxes and government spending cuts, he said.

Those trends have "increased our confidence that the job market gains will continue," Bernanke said at a press conference.

The Fed said Wednesday that it would scale back its monthly bond purchases to $75 billion from $85 billion. The purchases are intended to lower long-term interest rates and encourage more spending. The cut suggests that Fed policymakers think the job market and economy will continue to improve even with less help from the Fed.
Weekly US jobless claims hit 9-month high of 379K
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UNEMPLOYMENT BENEFITS

WASHINGTON (AP) -- The number of people applying for U.S. unemployment benefits last week rose 2,000 to a seasonally adjusted 304,000. Jobless claims continue to be near pre-recession levels despite the slight increase.

The Labor Department says that the four-week average of applications, a less volatile measure, fell 4,750 to 312,000. That is the lowest four-week average since October 2007, just two months before the Great Recession started. The average has fallen by 53,500 applications over the past 12 months.

Applications are a proxy for layoffs. The current level of claims suggests that employers are holding on their workers with the expectation of stronger economic growth ahead.

Employers added 192,000 jobs in March and 197,000 in February, the Labor Department reported. Hiring has picked up after a slowdown caused by severe winter weather.

MORTGAGE RATES

WASHINGTON (AP) -- Average U.S. rates on fixed mortgages fell this week for the second straight week as the spring home-buying season begins.

Mortgage buyer Freddie Mac says the average rate for the 30-year loan fell to 4.27 percent from 4.34 percent last week. The average for the 15-year mortgage eased to 3.33 percent from 3.38 percent.

Mortgage rates have risen about a full percentage point since hitting record lows about a year ago.

Many analysts have been expecting an improving economy to lift the housing market, which has been recovering over the past two years. But housing has struggled to maintain momentum. Rising home prices and higher mortgage rates have held back some potential home buyers. Others have had trouble qualifying for mortgages.

EARNS-GOLDMAN SACHS

NEW YORK (AP) -- Investment bank Goldman Sachs says its first-quarter earnings fell as fixed income trading slumped.

The bank earned $1.9 billion in the quarter, down 11 percent from the same period a year earlier when it made $2.2 billion.

The earnings were equivalent to $4.02 a share. Analysts polled by FactSet had predicted earnings of $3.49 a share.

Revenue totaled $9.3 billion, down 8 percent from a year earlier, when the bank generated revenue of $10.1 billion. The latest quarterly revenue beat analysts' expectations of $8.7 billion.

Goldman's stock rose $2.78, or 1.8 percent, to $160 in pre-market trading.

EARNS-PEPSICO

NEW YORK (AP) -- PepsiCo reports a stronger-than-expected first-quarter profit as the company slashed costs and sold more snacks around the world.

The company, which makes Frito-Lay, Gatorade, Mountain Dew and Tropicana, says global snack volume rose 2 percent while beverages were even from a year ago.

In its closely watched North American beverage unit, PepsiCo Inc. says volume was even. Growth in other drinks offset a 1 percent decline in sodas.

For the quarter, the company earned $1.22 billion, or 79 cents per share. Not including one-time items, it earned 83 cents per share, above the 75 cents per share Wall Street expected.

A year ago, it earned $1.08 billion, or 69 cents per share.

Revenue edged up to $12.62 billion, higher than the $12.39 billion analysts expected.

EARNS-MATTEL

EL SEGUNDO, Calif. (AP) -- Toy maker Mattel says weak sales of Barbie and markdowns to clear out excess inventory left over from a sluggish holiday season led to an unexpected first-quarter loss.

Toy makers are facing a weak environment globally due to the uncertain economy and popularity of electronic gadgets.

The largest U.S. toy maker says its net loss for the three months ended March 31 totaled $11.2 million, or 3 cents per share. That compares with net income of $38.5 million, or 11 cents per share last year. Analysts expected earnings of 7 cents per share.

The company which makes Disney Princess dolls and Hot Wheels cars says revenue fell 5 percent to $946.2 million. Analysts expected $947.6 million. Barbie revenue dropped 14 percent.

TARGET-SUBSCRIPTION SERVICE

NEW YORK (AP) -- Target is vastly expanding the goods that are available to order by subscription as it fends off its biggest non-traditional retail rival, Amazon.com.

The nation's second-largest discounter first dabbled with subscriptions last September, trying to win over haggard parents with 150 baby care products.

That program has been expanded more than tenfold this week to nearly 1,600 items across a much wider array of consumer goods. Everything from beauty products and pet supplies, to home office supplies like printer ink, are now available through subscription.

Target, based in Minneapolis, is playing catch up in the subscription arena, which has exploded as companies test consumer appetites for almost every niche, from socks to razors, to clothing and entertainment.

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