The latest unemployment reading from the Dept. of Labor reports that first-time claims for jobless benefits slightly rose last week from a two-month low to a level that remains consistent with a resilient labor market. Employers in the U.S. have become reluctant to fire or hire workers in recent months until the extent of the economic slowdown is clearer.
Although fewer auto industry layoffs occurred in Michigan last week, manufacturing layoffs (including the auto industry) were higher in other parts of the United States. As a result, initial claims for unemployment insurance rose by 4,000 to 308,000 in the week ending Oct. 7, the U.S. Labor Department reports today.
The latest week’s slightly higher number of newly laid-off workers filing claims for unemployment benefits comes after having fallen for two consecutive weeks, according to the government data released today. However, new claims for state unemployment insurance benefits filed by Saturday may not have captured about 15,000 workers who went on strike Oct. 5 at Goodyear tire plants in the U.S. and Canada.
Meanwhile, continuing unemployment claims rose by 5,000 to 2.44 million, their highest level since Sept. 9.
Initially this month, the Labor Dept. reported that the number of Americans seeking first-time unemployment benefits fell to the lowest in more than two months, pointing to a resilient labor market even as the economy slows. Automobile industry layoffs in Michigan added 15,513 first-time unemployment insurance claimants to the national rolls, but the overall number of initial claims came down, in part a result of fewer manufacturing industry claims in North Carolina, Georgia, Minnesota, South Carolina and Tennessee.
Most recently, the department’s four-week moving average of first-time claims continued its recent decline, falling to 313,250 — a decrease of 750 claims from the previous week’s revised average of 314,000. For the week ending Sept. 30, initial claims for unemployment insurance were revised to 304,000 from 302,000.
Some economists view the four-week average as a better indicator since it smoothes out distortions like strikes and weather-related events.
Earlier this month, the Labor Dept. said U.S. employers added 51,000 jobs last month in a sign of cooling economic growth. Meanwhile, the unemployment rate, based on a separate survey, fell to 4.6 percent last month from 4.7 percent. The U.S. manufacturing sector lost another 19,000 jobs in September, the third consecutive monthly decline, the Labor Dept. reported last week.
The growth in payrolls, seen as one of the best indicators of economic momentum, was far weaker than the 120,000 new jobs expected by Wall Street analysts. However, the report contained a sharp upward revision to August payrolls to show 188,000 new jobs instead of 128,000 in the past estimate.
Yesterday, the Department of Labor’s Bureau of Labor Statistics reported the job openings rate increased in August, while the hires rate decreased and the total separations rate remained essentially unchanged.
Over the year, the job openings rate rose in many of the private sector industries, in federal government, and in three of the four regions (Midwest, Northeast and South). The job openings rate did not decline significantly over the year in any industry or region.
From August 2005 to August 2006, the hires rate increased in state and local government and decreased in other services and in the Northeast region.
Over the year, the “quits” rate grew in educational services and in state and local government. The quits rate declined in construction, the retail trade, other services and the Northeast.
The other two components of total BLS’ so-called “separations” – layoffs and discharges, and other separations – from August 2005 to August 2006, decreased to 1.2 percent. During the same period, the other “separations” rate was little changed at 0.2 percent.
Over the 12 months ending in August 2006, hires have averaged 4.8 million per month and separations have averaged 4.5 million per month (not seasonally adjusted). The comparable figures for the prior 12-month period were also 4.8 million hires and 4.5 million separations.
Although the manufacturing sector of the U.S. economy remains far from a shutdown, the rate of growth among producers of durable and non-durable goods is likely to slow during the next three to six months, suggest data released Oct. 12 by the Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group.
Employers have become reluctant to fire or hire workers in recent months until the extent of the economic slowdown is clearer. For now, experts say, steady paychecks mean those with jobs are likely to keep spending and prevent the economy from sinking as the real estate market slumps.