U.S. Initial Jobless Claims Fell 24,000 to 344,000 Last Week
Feb. 19 (Bloomberg) -- The number of Americans filing initial unemployment claims fell last week to 344,000, close to a three- year low and a sign of halting improvement in the job market.
Initial applications fell by 24,000 in the week that ended Saturday from 368,000 a week earlier, the Labor Department said in Washington. It marked the first decrease since the week ended Jan. 24, when the number fell to 339,000 and matched the lowest since January 2001. The drop reflected declines in the states that had reported weather-related increases in the previous two weeks, the department said.
Productivity gains outpaced economic growth for a third straight year in 2003 as businesses looked to cut costs. Home Depot Inc. and Tyson Foods Inc. are among companies in the last week that have announced plans to improve efficiency, suggesting a stronger economy this year may not create as many jobs as in previous expansions.
``The jobs recovery is coming at a very slow pace,'' said Bryan Jordan, an economist at Banc One Investment Advisors in New York, before the report. ``Productivity growth has played a big part in holding down employment gains.''
Today's report corresponds to the week the Labor Department surveys households and businesses to calculate its monthly employment figures for February.
Economists had expected claims would drop to 355,000, based on the median of 39 forecasts in a Bloomberg News survey, from the 363,000 initially reported for the week earlier. Forecasts ranged from 330,000 to 370,000.
The four-week moving average of claims, a less-volatile indicator, rose to 352,000 from 351,750.
Continuing Claims
The number of people continuing to collect state jobless benefits jumped to 3.186 million, the highest this year, in the week that ended Feb. 7 from 3.080 million a week earlier.
The insured employment rate, which tends to track the U.S. jobless rate, increased to 2.5 percent in the week ended Feb. 7 from 2.4 percent. The Labor Department also said 28 states and territories reported a decrease in new claims, while 25 reported an increase. These data are reported with a one-week lag.
Productivity, or how much is produced for each hour worked, rose an average of 3.7 percent from 2001 to 2003, almost twice the economy's average 1.9 percent rate of expansion over the same period.
``To a surprising degree, firms seem able to continue identifying and implementing new efficiencies in their production processes and thus have found it possible so far to meet increasing orders without stepping up hiring,'' Federal Reserve Chairman Alan Greenspan, said in testimony before Congress last week.
Comparison
``As those opportunities to enhance efficiency become scarcer and as managers become more confident in the durability of the expansion, firms will surely once again add to their payrolls,'' Greenspan said.
The economy created an average of 73,000 jobs in the last five months compared with 196,800 a month during the record 10- year expansion that ended in March 2001.
The world's largest economy is projected to expand 4.6 percent this year, the most since 1984, according to the median estimate of economists in a separate Bloomberg News survey this month. Since record keeping began in 1947, productivity gains have never outstripped gross domestic product when growth was faster than 4 percent, Labor and Commerce Department statistics show.
Some businesses are still trying to streamline their operations.
`Cautious'
``We're being cautious like a lot of other companies in terms of spending and hiring,'' Ned Barnholt, chief executive of Agilent Technologies Inc., the world's biggest maker of scientific test gear, said in an interview yesterday. ``We're expecting a little bit of hiring this year, but the net effect is we won't add dramatically, if at all.''
The Palo Alto, California-based company said this week that sales in the fiscal first-quarter rose 16 percent and orders rose 27 percent.
Tyson, the world's largest meat processor, said Tuesday it plans to reduce its payroll by nearly 6,000 workers, primarily through attrition, as it spends close to $70 million on new equipment this year to further automate its facilities.
Home Depot, the world's largest home-improvement chain, said Friday it will eliminate as many as 100 jobs in Atlanta by April, the second round of job cuts in three months, as it boosts spending on computers to boost efficiency. It said workers losing their jobs may apply for other positions in the company.
Still, the chain expects to end the year with higher payrolls. It plans to open about 175 stores this year, employing about 35,000 people, the company has said.
Hiring Plans
More than 40 percent of executives from some of the largest U.S. companies said they would boost hiring in 2004, according to a survey by the Business Council. The Council is an invitation- only group of 121 chief executives from Fortune 500 companies, including General Electric Co. and DuPont Co. Bigger job gains would provide a more solid base for economic expansion and help President George W. Bush's reelection effort.
Bush yesterday backed off an administration forecast that 2.6 million jobs would be created this year, although he said at the White House that he expects the economy to ``get stronger.''
More than half of the 70 CEOs who responded to the Business Council survey said they shifted U.S. employment overseas over the past year. Only 41 percent blamed the trend for labor market weakness. Rather, 56 percent said they felt that ``exceptionally strong productivity growth had allowed them to boost production without having to hire more workers,'' according to the survey, which was taken between Jan. 30 and Feb. 13.
To contact the reporter on this story:
Carlos Torres in Washington ctorres2@bloomberg.net.
To contact the editor on this story:
Kevin Miller at kmiller@bloomberg.net.
Feb. 19 (Bloomberg) -- The number of Americans filing initial unemployment claims fell last week to 344,000, close to a three- year low and a sign of halting improvement in the job market.
Initial applications fell by 24,000 in the week that ended Saturday from 368,000 a week earlier, the Labor Department said in Washington. It marked the first decrease since the week ended Jan. 24, when the number fell to 339,000 and matched the lowest since January 2001. The drop reflected declines in the states that had reported weather-related increases in the previous two weeks, the department said.
Productivity gains outpaced economic growth for a third straight year in 2003 as businesses looked to cut costs. Home Depot Inc. and Tyson Foods Inc. are among companies in the last week that have announced plans to improve efficiency, suggesting a stronger economy this year may not create as many jobs as in previous expansions.
``The jobs recovery is coming at a very slow pace,'' said Bryan Jordan, an economist at Banc One Investment Advisors in New York, before the report. ``Productivity growth has played a big part in holding down employment gains.''
Today's report corresponds to the week the Labor Department surveys households and businesses to calculate its monthly employment figures for February.
Economists had expected claims would drop to 355,000, based on the median of 39 forecasts in a Bloomberg News survey, from the 363,000 initially reported for the week earlier. Forecasts ranged from 330,000 to 370,000.
The four-week moving average of claims, a less-volatile indicator, rose to 352,000 from 351,750.
Continuing Claims
The number of people continuing to collect state jobless benefits jumped to 3.186 million, the highest this year, in the week that ended Feb. 7 from 3.080 million a week earlier.
The insured employment rate, which tends to track the U.S. jobless rate, increased to 2.5 percent in the week ended Feb. 7 from 2.4 percent. The Labor Department also said 28 states and territories reported a decrease in new claims, while 25 reported an increase. These data are reported with a one-week lag.
Productivity, or how much is produced for each hour worked, rose an average of 3.7 percent from 2001 to 2003, almost twice the economy's average 1.9 percent rate of expansion over the same period.
``To a surprising degree, firms seem able to continue identifying and implementing new efficiencies in their production processes and thus have found it possible so far to meet increasing orders without stepping up hiring,'' Federal Reserve Chairman Alan Greenspan, said in testimony before Congress last week.
Comparison
``As those opportunities to enhance efficiency become scarcer and as managers become more confident in the durability of the expansion, firms will surely once again add to their payrolls,'' Greenspan said.
The economy created an average of 73,000 jobs in the last five months compared with 196,800 a month during the record 10- year expansion that ended in March 2001.
The world's largest economy is projected to expand 4.6 percent this year, the most since 1984, according to the median estimate of economists in a separate Bloomberg News survey this month. Since record keeping began in 1947, productivity gains have never outstripped gross domestic product when growth was faster than 4 percent, Labor and Commerce Department statistics show.
Some businesses are still trying to streamline their operations.
`Cautious'
``We're being cautious like a lot of other companies in terms of spending and hiring,'' Ned Barnholt, chief executive of Agilent Technologies Inc., the world's biggest maker of scientific test gear, said in an interview yesterday. ``We're expecting a little bit of hiring this year, but the net effect is we won't add dramatically, if at all.''
The Palo Alto, California-based company said this week that sales in the fiscal first-quarter rose 16 percent and orders rose 27 percent.
Tyson, the world's largest meat processor, said Tuesday it plans to reduce its payroll by nearly 6,000 workers, primarily through attrition, as it spends close to $70 million on new equipment this year to further automate its facilities.
Home Depot, the world's largest home-improvement chain, said Friday it will eliminate as many as 100 jobs in Atlanta by April, the second round of job cuts in three months, as it boosts spending on computers to boost efficiency. It said workers losing their jobs may apply for other positions in the company.
Still, the chain expects to end the year with higher payrolls. It plans to open about 175 stores this year, employing about 35,000 people, the company has said.
Hiring Plans
More than 40 percent of executives from some of the largest U.S. companies said they would boost hiring in 2004, according to a survey by the Business Council. The Council is an invitation- only group of 121 chief executives from Fortune 500 companies, including General Electric Co. and DuPont Co. Bigger job gains would provide a more solid base for economic expansion and help President George W. Bush's reelection effort.
Bush yesterday backed off an administration forecast that 2.6 million jobs would be created this year, although he said at the White House that he expects the economy to ``get stronger.''
More than half of the 70 CEOs who responded to the Business Council survey said they shifted U.S. employment overseas over the past year. Only 41 percent blamed the trend for labor market weakness. Rather, 56 percent said they felt that ``exceptionally strong productivity growth had allowed them to boost production without having to hire more workers,'' according to the survey, which was taken between Jan. 30 and Feb. 13.
To contact the reporter on this story:
Carlos Torres in Washington ctorres2@bloomberg.net.
To contact the editor on this story:
Kevin Miller at kmiller@bloomberg.net.
