Drop in first-time claims for jobless aid exceeds forecast

Improving job market suggested

`help-wanted signs out,' railroad says

October 08, 2004|By BLOOMBERG NEWS

WASHINGTON - The number of Americans filing initial claims for unemployment benefits declined more than forecast last week to the lowest level in a month, suggesting that the labor market is improving as the U.S. economy strengthens.

"As the employment data arrive over the next several months, we may very well see the job numbers snap back," Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, said in a speech to a regional development group in Cincinnati.

First-time jobless claims declined by 37,000 to 335,000 in the week that ended Oct. 2, the Labor Department said yesterday. Hurricanes that struck Florida last month had little effect on the figures, a department spokesman said.

Monster Worldwide Inc., the New York-based operator of the biggest Internet job service, said yesterday that its index of online job postings rose 4.1 points to 151, the highest since its inception last year. Online demand for workers rose in all U.S. regions for a second month, and postings rose for retail, mining and financial services.

"We have the help-wanted signs out," said David Goode, chief executive at Norfolk Southern Corp., the fourth-largest U.S. railroad. He said the Norfolk, Va.-based railroad plans to hire about 2,000 people this year.

Claims last week, the lowest since the week that ended Sept. 4, were forecast to fall to 355,000, from an originally reported 369,000.

The report is "further evidence of sustained improvements in the overall U.S. employment picture," said Jeff Taylor, co-founder of Monster Worldwide. It is "a promising sign that the job recovery is beginning to take root across the country."

Manufacturers might have added 10,000 jobs last month, according to economists surveyed ahead of today's payrolls report. States with a concentration of manufacturing jobs such as Ohio, Michigan and Pennsylvania are among those closely contested in this year's U.S. presidential election.

The last employment report before November's election may show hurricanes cost the economy as many as 100,000 jobs last month, according to economists Bill Sharp of J.P. Morgan Securities Inc., Richard Yamarone of Argus Research Corp. and Christopher Low of FTN Financial.

All three based their forecasts on the presumption that payrolls would have been about 100,000 jobs stronger without the storms. Estimates for September payrolls range from Yamarone's forecast for a decline of 10,000 to Wachovia Corp. economist John Silvia's forecast of a 250,000 gain.

The number of people continuing to collect state unemployment benefits dropped to 2.864 million in the week that ended Sept. 25, from 2.865 million the week before. The four-week moving average fell to 2.868 million, the lowest since the week that ended June 2, 2001, from 2.874 million.

The insured unemployment rate, which tends to move with the unemployment rate, held at 2.3 percent. Twenty-six states and territories reported an increase in claims, while 27 had a decrease in the week that ended Sept. 25.

Continuing claims, the insured unemployment rate and the state data are reported with a one-week lag behind initial claims, which have averaged 344,700 this year, down from 402,000 last year, when payrolls shrank for seven consecutive months.

A survey of chief executive officers by the Business Council, an invitation-only group of CEOs from Procter & Gamble Co., DuPont Co., General Electric Co. and other Fortune 500 corporations, found that 74 percent of them expected hiring to rise or remain stable in 2005.

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