Skip to content
Business
Link copied to clipboard

Jobless-claims low hints at hiring pickup

WASHINGTON - November marked a two-year low in a key figure on the number of people applying for initial unemployment benefits, suggesting that the tight job market may be easing at last.

Job seekers Donald Alexander and Felicia Gayden wait in line at a job fair in Livonia, Mich. While the weekly number for unemployment claims was up, the four-week moving average dropped to a two-year low. Story, D3.
Job seekers Donald Alexander and Felicia Gayden wait in line at a job fair in Livonia, Mich. While the weekly number for unemployment claims was up, the four-week moving average dropped to a two-year low. Story, D3.Read morePAUL SANCYA / Associated Press

WASHINGTON - November marked a two-year low in a key figure on the number of people applying for initial unemployment benefits, suggesting that the tight job market may be easing at last.

The number of new claims for unemployment benefits - filed by Americans just laid off - actually increased last week, by 26,000 to a seasonally adjusted 436,000, the Labor Department said Thursday. Still, the figures are often volatile around the Veterans Day and Thanksgiving holidays.

A more useful figure for economists was a decline in the four-week moving average of claims, which smooths out volatility. That fell to 431,000 last week, a two-year low, the department reported.

"After being little changed for most of the year, new jobless claims have broken to the downside in the last several weeks, suggesting that labor markets may actually be improving," said Steven Wood, chief economist for Insight Economics L.L.C.

Some economists are now sketching a more optimistic forecast for Friday's report on November employment, though few expect a change in the 9.6 percent unemployment rate. The jobless rate has been at more than 9 percent of the labor force since May 2009, though the recession officially ended the following month.

"We are starting to get some self-sustaining momentum in the economy," said Nigel Gault, chief U.S. economist at IHS Global Insight Inc.

Gault predicts Friday's report will show that private companies added 180,000 jobs last month - a bump-up from his earlier forecast of 160,000 new jobs. In October, private companies added 159,000 jobs. That marked a spurt of job creation after hiring had all but stalled during the summer.

"As jobs pick up, that is making consumers a bit more confident and willing to spend," Gault said.

Applications for unemployment benefits have fallen below 450,000 in each of the past four weeks, after hovering above 450,000 for most of the year. That is a big improvement from March 2009, when applications peaked at 651,000.

Still, even if the optimistic job projections for November prove accurate, they will not be strong enough to drive down the unemployment rate. Most economists say they think the jobless rate will be unchanged in November.

The economy would need to consistently add 200,000 to 300,000 jobs a month to make a noticeable dent in the unemployment rate, analysts say. It could take until near the end of this decade to drop the unemployment rate to a more normal 6 percent, they say.

"As the economy continues to gain strength and optimism continues to grow among businesses, hiring will strengthen," Charles I. Plosser, president of the Federal Reserve Bank of Philadelphia, said in a speech Thursday.