BL: U.S. Initial Jobless Claims Fell 9,000 to 348,000 Last Week
By Bob Willis
Feb. 14 (Bloomberg) -- The number of Americans filing first- time claims for unemployment benefits fell for a second week, staying in a range consistent with a slowing job market.
Initial jobless claims decreased by 9,000 to 348,000 in the week ended Feb. 9, from 357,000 a week earlier, the Labor Department said today in Washington. The four-week moving average of claims, a less volatile measure, rose to the highest level since October 2005.
Homebuilders, lenders, carmakers and other manufacturers are stepping up firings, threatening to slow consumer spending that makes up the largest part of the economy. The U.S. in January lost jobs for the first time in four years, increasing the odds an expansion in its seventh year may falter.
``I would expect to see continued weakness in claims, consistent with a less dynamic employment market,'' Robert Dye, senior economist at PNC Financial Services Group in Pittsburgh, Pennsylvania, said before the report. ``We're expecting to see continued weak jobs numbers for the next couple of months, indicative of an economy teetering on the verge of recession, if not already in recession.''
Economists had forecast claims would fall to 347,000 from the previously reported 356,000 for the week ended Feb. 9, according to the median of 40 forecasts in a Bloomberg News survey. Estimates ranged from 330,000 to 392,000.
The four-week moving average of claims increased for a third straight week, to 347,250 from 335,250.
The number of people staying on benefit rolls dropped to 2.761 million in the week ended Feb. 2, according to today's report, from 2.77 million.
January Report
The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, stayed at 2.1 percent.
The U.S. lost 17,000 jobs last month, the first decline since August 2003, and service industries shrank more quickly than any time since the last recession, reports showed in the past two weeks.
The Federal Reserve cut its key rate by 1.25 percentage point during two meetings over nine days in January, the fastest rate reduction since the federal funds rate became the main policy tool around 1990. Citing ``some softening in labor markets'' in its Jan. 30 statement, the Fed said it would act ``as needed'' to address downside risks to growth.
In today's report, 30 states and territories reported an increase in new claims, 22 had a decline and one was unchanged. This data is also reported with a one-week lag.
Rising Trend
Claims tend to rise as job creation slows, and filings for jobless benefits have been creeping higher. Weekly claims have averaged 335,000 so far this year, compared with 322,200 for all of last year and 313,000 in 2006.
Carmakers are reducing staff along with home builders, mortgage lenders and other companies impacted by the worst housing recession in a quarter century.
General Motors Corp. is increasing buyout offers to its most- senior U.S. workers to encourage more of its 74,000 union employees to leave and make way for replacements who can be paid half as much, the Detroit-based automaker said Feb. 12.
The buyouts are part of Chief Executive Officer Rick Wagoner's plan to cut U.S. labor costs in half and trim another $5 billion from expenses by 2011.
Morgan Stanley, the second-biggest U.S. securities firm, will eliminate 1,000 jobs by scaling back its U.S. residential mortgage business and closing the Advantage Home Loans unit in the U.K., the New York-based company said yesterday in a statement.
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
Last Updated: February 14, 2008 08:30 EST
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