More Americans filed for unemployment benefits last week as annual auto-plant shutdowns continued to affect data.
Jobless claims rose by 7,000 to 343,000 in the week ended July 20 from a revised 336,000 the prior period, Labor Department figures showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg projected 340,000. The retooling at carmakers and school closings typical during this time of year continued to influence the figures last week, a spokesman said as the data were released.
Beyond the swings, the job market is improving as firings slow and payroll gains pick up, raising the odds that consumer spending will accelerate in the second half of the year. Fewer dismissals would lay the foundation for larger gains in hiring as the peak of the drag from government budget cuts passes.
“The trend in claims is fairly stable,” said Sean Incremona, a senior economist at 4Cast Inc. in New York, who projected an increase in claims. “We’re sustaining the improvement we saw from late last year, but not necessarily gaining a great deal of momentum on top of that.”
Orders for durable goods rose more than forecast in June, pointing to a pickup in manufacturing that will help the economy accelerate in the second half of the year, figures from the Commerce Department also showed today.
Bookings for goods meant to last at least three years increased 4.2% after a revised 5.2% gain in May that was bigger than initially reported. The median forecast of 79 economists surveyed by Bloomberg called for a 1.4% advance.
Stock-index futures held earlier losses after the reports. The contract on the Standard & Poor’s 500 Index maturing in September dropped 0.4% to 1,676.9 at 9 a.m. in New York.
Economists’ estimates in the Bloomberg survey ranged from claims of 325,000 to 370,000 after an initially reported 334,000 the previous week.
No states estimated jobless claims last week, the Labor Department spokesman said.
Auto plants typically shut down in early July to retool for the new model year, often playing havoc with the claims data.
Automobile companies have altered their annual shutdown schedules this year in response to the increase in demand for new vehicles.
Ford Motor Co. earlier said it will idle most of its North American assembly plants for one week this summer instead of two, to increase output. Three of Chrysler Group LLC’s assembly plants and all except one of its engine, transmission and stamping factories will skip a summer shutdown this year. Since its 2009 bankruptcy, General Motors Co. hasn’t had a formal summer shutdown, Mark Reuss, president of the company’s North American operations, told reporters in May.
The four-week moving average, a less volatile measure than the weekly figures, declined to 345,250 last week, the lowest since May, from 346,500.
The number of people continuing to receive jobless benefits dropped by 119,000 to 3 million in the week ended July 13. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments fell by about 21,300 to 1.62 in the week ended July 6.
The unemployment rate among people eligible for benefits dropped to 2.3% in the week ended July 13 from 2.4% the prior week, today’s report showed.
Thirty-eight states and territories reported an increase in claims, while 15 reported a decrease. These data are reported with a one-week lag.
Demand for automobiles is encouraging hiring of skilled workers. Ford, the second-largest U.S. automaker by vehicle sales, said July 23 it will hire 3,000 salaried employees this year, 800 more than originally planned, as it moves to fill positions in engineering and other technical area.
“Engineers and technical professionals are in as much demand as our cars, trucks and SUVs,” Felicia Fields, group vice president for human resources, said in a statement announcing the plan. About half the positions have already been filled, according to the statement.
Initial jobless claims reflect weekly firings and typically wane before job growth climbs.
Payrolls rose by 195,000 workers for a second month in June, indicating the U.S. is poised for faster growth as it shakes off the impact of fiscal policies that reigned in growth earlier in the year. The jobless rate stayed at 7.6%, close to a four-year low.
Meanwhile, some companies are reducing headcount. More than 120 workers at Walt Disney Co.’s film unit have lost their jobs this year as the company tries to boost profit, according to Disney filings with the state of California. The company is based in Burbank, California.
Federal Reserve Chairman Ben S. Bernanke said in testimony before Congress last week that “the job situation is far from satisfactory.” Bernanke said the central bank’s asset purchases “are by no means on a preset course” and could be reduced more quickly or expanded as economic conditions warrant.
Several Fed officials have said they want to see more signs employment is picking up before they’ll begin scaling back $85 billion in monthly bond purchases, based on minutes from the last policy-making committee meeting.