Jobless Claims in U.S. Fall, With Average at Eight-Year Low A healthier job market helped spark the biggest gain in Americans’ confidence in almost a year, raising prospects for the economy at the start of fourth quarter. The number of people seeking jobless benefits at state employment agencies averaged 287,750 in the four weeks ended Oct. 4, an eight-year low, according to figures today from the Labor Department in Washington. The Bloomberg gauge of consumer sentiment climbed last week by the most since mid-November. Companies are responding to rising demand by retaining workers and boosting headcounts, setting the stage for stronger sales that will help make up for weakness in the rest of the world. The report on sentiment showed households were more upbeat about the buying climate than at any time since mid-July as gasoline prices fell and job prospects improved. “The labor market is doing pretty well,” said Thomas Simons, an economist at Jefferies LLC in New York, which projected a drop in claims. “The less slack there is in the labor force, the more likely there is to be upward pressure on wages, which then of course would filter through to greater demand for all sorts of goods and services, and better growth.” First-time claims for jobless benefits unexpectedly dropped by 1,000 to 287,000 last week, the Labor Department’s report showed. The four-week average, a less-volatile measure, was the lowest since February 2006. The Bloomberg Consumer Comfort Index climbed to 36.8 in the period ended Oct. 5 from a four-month low of 34.8. A gauge of attitudes about the world’s largest economy registered the biggest increase since 2007. Germany Exports The figures point to an economy that is improving while some U.S. trading partners languish. German exports slumped 5.8 percent in August, the most since early 2009, a report today from the Federal Statistics Office in Wiesbaden showed. While the data are often volatile, the decline depicts an economy that is stumbling as the euro-area recovery grinds to a halt. The European Central Bank has added unprecedented stimulus to try to revive inflation and economic growth in the 18-nation currency bloc. International Monetary Fund Managing Director Christine Lagarde said at a press conference today in Washington that there is about a 35 percent chance of a euro-area recession. The Standard & Poor’s 500 Index plunged the most since April, erasing its biggest rally this year, on concern that slowing growth in Europe will hurt the U.S. economy. The S&P 500 dropped 2.1 percent to 1,928.21 at the close in New York. Continuing Claims The number of people continuing to receive jobless benefits fell by 21,000 to 2.38 million in the week ended Sept. 27, the fewest since May 2006. Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate. Companies hired a net 248,000 workers in September, Labor Department figures showed last week. The unemployment rate fell to 5.9 percent last month, the lowest since 2008. Federal Reserve policy makers are watching for evidence the labor market has been restored to full health before raising interest rates, which have been held near zero since December 2008. Most Fed policy makers indicate they expect an initial rate rise next year. “The consensus view is that lift-off will take place around the middle of next year,” New York Fed President William C. Dudley said Oct. 7 in a speech in Troy, New York. “That seems like a reasonable view to me.” Views of Economy The Bloomberg gauge of sentiment about the state of the economy climbed to 25.6 last week, the highest since the end of August, from 22.4. The buying climate index, which asks whether this is a good time to make purchases, increased to 33.8 from 31.9. The gain probably reflected cheaper prices at the gas pump, which helps free up money to spend elsewhere. The average nationwide cost of a gallon dropped to $3.25 yesterday, the lowest this year, according to data from AAA, the nation’s largest motoring group. The Bloomberg measure of personal finances rose to 51 from 50.2, extending to 19 the number of weeks it’s held above 50, the dividing line between positive and negative perceptions. Homeowner Sentiment Today’s report showed confidence among homeowners rose to its highest level since December 2007. Sentiment also improved for renters, though the gap between the two groups was the second-largest in four years. “The housing market has the potential to grow for many years as the economy continued to boost job growth and consumer confidence improved,” Larry Seay, chief financial officer of Meritage Homes Corp., a Scottsdale, Arizona-based builder of single-family entry and luxury homes, said at a conference on Oct. 1. Confidence among those earning more than $100,000 a year also advanced this week to the highest level since the middle of April. Among those earning less than $50,000 confidence increased, narrowing the gap between the two income groups after it reached its widest point since November. Sentiment rose in six of seven wage brackets.
Posted on: Fri, 10 Oct 2014 11:22:05 +0000
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