U.S. Initial Jobless Claims Rose by 17,000 to 356,000 Last Week
Feb. 5 (Bloomberg) -- The number of Americans filing first- time applications for unemployment benefits unexpectedly rose to 356,000 last week after reaching a three-year low, a government report showed.
Initial jobless claims increased by 17,000 for the week that ended Saturday from a revised 339,000 the previous week, the Labor Department said in Washington. Snowstorms in parts of the country may have caused temporary layoffs at construction and other companies, leading to the rise in filings, a Labor spokesman said. The prior week's level matched the lowest since January 2001.
Companies have slowed the pace of firings after the economy grew in the last half of 2003 at the fastest rate since 1984. Hiring, a missing element in the two-year-old expansion, may be poised to rise. A Labor Department report tomorrow may show the biggest monthly rise in employment in three years.
``Faster economic growth and higher profit margins are leading to an upturn in hiring and hours,'' said Robert Mellman, an economist at J.P. Morgan Securities Inc. in New York, before the report. J.P. Morgan economists are forecasting a 125,000 rise in January payroll employment.
Federal Reserve policy makers said last week after keeping their benchmark lending rate at the lowest in almost 46 years that while hiring ``remains subdued,'' there are signs of improvement in the labor market.
Economists had projected 340,000 first-time claims last week after an initially reported 342,000 the week before, based on the median of 39 forecasts in a Bloomberg New survey. Forecasts ranged from 330,000 to 355,000.
``Last week's claims were impacted by some inclement weather it appears,'' the Labor spokesman said. The government is not able to quantify the effect of the weather on filings, he said.
Continuing Claims
The number of people continuing to collect state jobless benefits in the week ended Jan. 24 held at 3.123 million. The four-week average of continuing claims fell to 3.123 million, the lowest since August 2001, from 3.162 million.
Jobless rolls have fallen by 657,000 since reaching a 20- year high of 3.78 million in the week ended June 28, according to Labor Department statistics.
``Given the strength of the data we've been seeing, I think we should begin to start seeing permanent employment pick up very soon,'' said Arun Raha, senior economist at Eaton Corp., in a televised interview with Bloomberg News on Monday. ``If you look around at the manufacturing sector as a whole, I think the general consensus is that people are beginning to add employees now.'' Cleveland-based Eaton is the No. 2 maker of hydraulic equipment, behind Parker Hannifin Corp.
January Employment
The insured employment rate, which tends to track the U.S. jobless rate, held at 2.5 percent in the week before last. The Labor Department said 51 states and territories reported a decrease in new claims while two reported an increase.
Companies may have increased payrolls by 175,000 in January after an increase of 1,000 in December, according to the median estimate of economists in a Bloomberg News survey. The last time the economy created as many jobs in a single month was November 2000.
Jobless claims averaged 347,400 last month, down from 402,000 in 2003. Historically, claims figures of about 340,000 are consistent with payroll growth of more than 200,000 a month, according to Joseph Abate, a senior economist at Lehman Brothers Inc. in New York.
``With order books growing, the need to get the products out the door quicker is building and that implies that productivity alone is not getting the job done, so more workers will be required.'' said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania, before the report.
Economic Growth
The economy grew 6.1 percent in the second half of last year, the strongest six months since 1984. It will expand 4.4 percent this year, according to assumptions in the White House's fiscal 2005 budget released Monday. The forecast matched the median estimate of 57 economists in a Bloomberg News survey last month.
Increases in corporate profits may be putting companies in a position to hire. Companies led by Citigroup Inc., Intel Corp. and Exxon Mobil Corp. had their biggest quarterly profit gain in a decade, helped by renewed business investment and tax cuts.
Profits rose an average of 28.8 percent in the fourth quarter for the 347 companies in the Standard & Poor's 500 Index that had reported earnings by Tuesday. The gain is the largest since a 30.3 percent increase in the third quarter of 1993, according to Thomson Financial.
To contact the reporter on this story;
--Joe Richter in Washington, or jrichter1@bloomberg.net
To contact the editor for this story;
Kevin Miller, or kmiller@Bloomberg.net
Last Updated: February 5, 2004 08:30 EST
Feb. 5 (Bloomberg) -- The number of Americans filing first- time applications for unemployment benefits unexpectedly rose to 356,000 last week after reaching a three-year low, a government report showed.
Initial jobless claims increased by 17,000 for the week that ended Saturday from a revised 339,000 the previous week, the Labor Department said in Washington. Snowstorms in parts of the country may have caused temporary layoffs at construction and other companies, leading to the rise in filings, a Labor spokesman said. The prior week's level matched the lowest since January 2001.
Companies have slowed the pace of firings after the economy grew in the last half of 2003 at the fastest rate since 1984. Hiring, a missing element in the two-year-old expansion, may be poised to rise. A Labor Department report tomorrow may show the biggest monthly rise in employment in three years.
``Faster economic growth and higher profit margins are leading to an upturn in hiring and hours,'' said Robert Mellman, an economist at J.P. Morgan Securities Inc. in New York, before the report. J.P. Morgan economists are forecasting a 125,000 rise in January payroll employment.
Federal Reserve policy makers said last week after keeping their benchmark lending rate at the lowest in almost 46 years that while hiring ``remains subdued,'' there are signs of improvement in the labor market.
Economists had projected 340,000 first-time claims last week after an initially reported 342,000 the week before, based on the median of 39 forecasts in a Bloomberg New survey. Forecasts ranged from 330,000 to 355,000.
``Last week's claims were impacted by some inclement weather it appears,'' the Labor spokesman said. The government is not able to quantify the effect of the weather on filings, he said.
Continuing Claims
The number of people continuing to collect state jobless benefits in the week ended Jan. 24 held at 3.123 million. The four-week average of continuing claims fell to 3.123 million, the lowest since August 2001, from 3.162 million.
Jobless rolls have fallen by 657,000 since reaching a 20- year high of 3.78 million in the week ended June 28, according to Labor Department statistics.
``Given the strength of the data we've been seeing, I think we should begin to start seeing permanent employment pick up very soon,'' said Arun Raha, senior economist at Eaton Corp., in a televised interview with Bloomberg News on Monday. ``If you look around at the manufacturing sector as a whole, I think the general consensus is that people are beginning to add employees now.'' Cleveland-based Eaton is the No. 2 maker of hydraulic equipment, behind Parker Hannifin Corp.
January Employment
The insured employment rate, which tends to track the U.S. jobless rate, held at 2.5 percent in the week before last. The Labor Department said 51 states and territories reported a decrease in new claims while two reported an increase.
Companies may have increased payrolls by 175,000 in January after an increase of 1,000 in December, according to the median estimate of economists in a Bloomberg News survey. The last time the economy created as many jobs in a single month was November 2000.
Jobless claims averaged 347,400 last month, down from 402,000 in 2003. Historically, claims figures of about 340,000 are consistent with payroll growth of more than 200,000 a month, according to Joseph Abate, a senior economist at Lehman Brothers Inc. in New York.
``With order books growing, the need to get the products out the door quicker is building and that implies that productivity alone is not getting the job done, so more workers will be required.'' said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania, before the report.
Economic Growth
The economy grew 6.1 percent in the second half of last year, the strongest six months since 1984. It will expand 4.4 percent this year, according to assumptions in the White House's fiscal 2005 budget released Monday. The forecast matched the median estimate of 57 economists in a Bloomberg News survey last month.
Increases in corporate profits may be putting companies in a position to hire. Companies led by Citigroup Inc., Intel Corp. and Exxon Mobil Corp. had their biggest quarterly profit gain in a decade, helped by renewed business investment and tax cuts.
Profits rose an average of 28.8 percent in the fourth quarter for the 347 companies in the Standard & Poor's 500 Index that had reported earnings by Tuesday. The gain is the largest since a 30.3 percent increase in the third quarter of 1993, according to Thomson Financial.
To contact the reporter on this story;
--Joe Richter in Washington, or jrichter1@bloomberg.net
To contact the editor for this story;
Kevin Miller, or kmiller@Bloomberg.net
Last Updated: February 5, 2004 08:30 EST
