First-time jobless claims skid by 43,000

Decline is to 348,000, a 34-month low

November 07, 2003|By BLOOMBERG NEWS

WASHINGTON - The number of Americans filing for unemployment benefits fell last week to the lowest since January 2001, as faster economic growth encouraged more companies to hold on to workers after shedding more than a million jobs in two years.

First-time jobless claims fell by 43,000 to 348,000 in the week that ended Saturday, from a revised 391,000 a week earlier, the Labor Department said. Economists had forecast a drop to 380,000.

Productivity, a measure of how much an employee produces for every hour of work, rose at an 8.1 percent annual rate from July through September, the most since the first three months of last year, another Labor Department report said.

The Commerce Department reported last week that the economy grew last quarter at the fastest pace in nearly two decades as productivity surged and labor costs fell, lifting corporate profits.

The third quarter's GDP growth of 7.2 percent at an annual rate is "not sustainable," Federal Reserve Chairman Alan Greenspan said yesterday. There is also a "dwindling supply of efficiencies," meaning that companies may have to hire more workers to meet demand and rebuild depleted inventories, the chairman said.

The United States has lost 1.34 million jobs since the last recession ended in November 2001 and gave way to what Fed Governor Ben S. Bernanke dubbed a "job-loss recovery." A pickup in the job market might aid re-election prospects next year for President Bush, who has overseen an economy that shed 2.6 million jobs since he took office in January 2001.

Today's Labor Department report on October employment is expected to show that the economy added 65,000 jobs last month, a second straight increase and only the third gain this year.

Economists had estimated that claims last week would slip from the initially reported 386,000 the week before, based on the median of 36 projections in a Bloomberg News survey. Claims were the lowest since 339,000 in the week that ended Jan. 20, 2001, two months before the recession began.

Companies including computer-chip maker Advanced Micro Devices Inc., computer maker International Business Machines Corp., telephone company Verizon Communications Inc., and electronics retailer Best Buy Co., have all said in recent weeks that they plan to increase hiring.

The four-week moving average of benefit filings, a less volatile measure than the weekly total, fell to 380,000, the lowest since the week ended March 10, 2001. The number of people continuing to collect state unemployment benefits dropped by 22,000 to 3.511 million in the week that ended Oct. 25.

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