Filings remain elevated as Northeast grapples with Sandy fallout
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — First-time applications for unemployment benefits declined sharply last week, government data showed Wednesday, but the number of new claims filed remains at high levels due to the aftereffects of Hurricane Sandy.
Initial jobless claims dropped by 41,000 to a seasonally adjusted 410,000 in the week ended Nov. 17, the Labor Department said. Economists surveyed by MarketWatch had forecast claims would fall to 418,000.
Applications for jobless benefits soared in the prior week as the deadly late-season superstorm slammed into the Northeast. Claims rose a revised 90,000 to 451,000 in the prior week, up from the initial estimate of a 78,000 increase to 439,000.
That was the biggest weekly rise in claims since Hurricane Katrina hit the Gulf Coast in the late summer of 2005.
A less volatile measure of claims, the four-week moving average, rose by 9,500 to 396,250.
Stock futures were steady after the claims data were released.
Reflecting the impact of Sandy, about 75,000 of the 90,000 increase in claims in the week of Nov. 10 were seen in New York and New Jersey. Pennsylvania and Connecticut also reported major increases.
The level of claims in the Nov. 10 week soared to the highest since April 2011.
Workers can file claims if their workplaces are forced to close and they aren’t paid.
Economists expect claims will continue to pour in for several more weeks. After Katrina, claims remained elevated for more than a month.
Sal Guatieri, economist at BMO Capital Markets, said that nonfarm payrolls should slow sharply owing to Sandy in November after the gain of 171,000 in October.
Before Sandy, jobless claims had fluctuated between 360,000 and 390,000 this year, underscoring sluggish hiring trends in the U.S. economy.
Last week’s claims were reported a day earlier than usual, in light of the Thanksgiving holiday.
In the week ended Nov. 10, continuing claims declined by 30,000 to a seasonally adjusted 3.33 million. Continuing claims reflect the number of people who already receive regular unemployment benefits. Most states offer 26 weeks of unemployment pay.
About 5.24 million people received some kind of state or federal benefit in the week ended Nov. 3, up 244,125 from the prior week. Total claims are reported with a two-week lag.