Jobless claims in U.S. decrease as California clears backlog

Continuing Claims

Continuing claims don’t include Americans who have exhausted their traditional state aid and are receiving emergency and extended benefits under federal programs. Those job seekers declined by about 6,700 to 1.32 million in the week ended Oct. 12.

The unemployment rate among people eligible for benefits held at 2.2% in the week of Oct. 19, where it’s been since mid September.

Forty-eight states and territories reported a decrease in claims, while five reported an increase. These data are reported with a one-week lag. Maryland and Virginia were among the states reporting fewer claims two weeks ago, a sign firings among government contractors are subsiding.

No states estimated their data last week, the Labor Department said.

Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate. The government shutdown kept some 800,000 federal employees from working and delayed the Labor Department’s October payrolls report by a week, to Nov. 8.

Fed Statement

Yesterday, the Federal Reserve said it needs more evidence of stronger growth before it can dial down its record $85 billion in monthly bond purchases, citing home sales in particular.

“The recovery in the housing sector slowed somewhat in recent months,” the Federal Open Market Committee said at the end of a two-day meeting in Washington. “Fiscal policy is restraining economic growth.”

The central bank left unchanged its statement that it probably will hold its target interest rate near zero “at least as long as” unemployment exceeds 6.5%.

While the economy continues to add jobs, the housing slowdown is rippling through the labor market. Home lenders in particular are feeling the effects of a decrease in refinancing. Bank of America Corp., the second-largest U.S. lender, is cutting jobs in its mortgage division. The financial services company, based in Charlotte, North Carolina, will dismiss about 3,000 people in the fourth quarter.

Wells Fargo & Co., the biggest U.S. mortgage lender, has cut more than 5,700 positions since midyear, and No. 2-ranked JPMorgan Chase & Co. has said it may dismiss 15,000.

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