Jobless claims data suggests labor market strength

Hundreds of job seekers wait in line with their resumes to talk to recruiters (R) at the Colorado Hospital Association health care career fair in Denver April 9, 2013. REUTERS/Rick Wilking
Hundreds of job seekers wait in line with their resumes to talk to recruiters (R) at the Colorado Hospital Association health care career fair in Denver April 9, 2013. REUTERS/Rick Wilking

The number of Americans filing new claims for unemployment benefits fell more than expected last week, pointing to resilience in the labor market despite belt-tightening by Washington.

The improving job market tone is helping to prop up housing, with rising home prices keeping domestic consumption supported. But tighter fiscal policy as the government tries to slash its bloated budget deficit is dampening factory activity.

Initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 340,000 last week, the Labor Department said on Thursday. Economist had expected claims to fall to 345,000.

The drop unwound most of the prior week’s jump and suggested employers were not laying off workers in response to fiscal austerity, especially the $85 billion in across-the-board government spending cuts.

“The evidence from jobless claims suggests that layoffs have slowed, which hints at faster net job creation,” said John Ryding, chief economist at RDQ Economics in New York.

The labor market is being closely watched by the Federal Reserve as debate heats up over the future of its expansive monetary stimulus.

Fed Chairman Ben Bernanke told lawmakers that a decision to scale back the $85 billion in bonds the U.S. central bank is buying each month could come at one of its “next few meetings” if the economy appeared set to maintain momentum.

Economists believe that decision could come as early as the September meeting.

A separate report from the Commerce Department showed new single family home sales rose 2.3 percent last month to a 454,000-unit pace. The median sales price for a new home jumped 14.9 percent from a year ago to a record $271,600.

“We have seen some momentum in the housing market. The improving sales are a very broad and powerful positive effect for the U.S. economy,” said Robert Dye, chief economist at Comerica in Dallas.

MANUFACTURING STRUGGLING

Data on Wednesday showed home resales increased in April to their highest level in nearly 3-1/2 years, with the median price for a previously owned house the highest since August 2008.

Relative strength in the housing market is helping to mitigate some of the drag from higher taxes and deep government spending cuts, which has been evident in manufacturing data.

In a separate report, financial data firm Markit said its preliminary Manufacturing Purchasing Managers Index fell to a seven-month low of 51.9 in May from 52.1 in April. A reading above 50 indicates expansion.

“Slower growth could be linked to a combination of fiscal drag hurting demand at home while at the same time many export markets remain in fragile states,” said Chris Williamson, chief economist at Markit.

That, he added, suggested manufacturing’s boost to U.S. growth in the second quarter would be modest at best.

U.S. financial markets were little moved by the reports as investors continued to digest Bernanke’s comments on Wednesday and weak factory data from China.

Stocks on Wall Street fell, with the Standard & Poor’s 500 index on pace for its first back-to-back daily drop in a month. U.S. Treasury debt prices rose, while the dollar fell against a basket of currencies.

Last week’s claims data covered the survey period for the government’s report on nonfarm payrolls for May.

Claims dropped 15,000 between the April and May survey periods, suggesting steady gains in employment this month. Employers added 165,000 jobs to their payrolls in April.

The four-week moving average for new claims, which irons out week-to-week volatility, slipped 500 to 339,500.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 112,000 to 2.91 million in the week ended May 11. That was the first time in five years so-called continuing claims were below the 3 million mark.



News
Entertainment
Sports
Lifestyle
Local

Mayor pledges lower greenhouse gas emissions from New…

Just hours before the start of the People’s Climate March on Sunday, and two days ahead of the United Nations Climate Summit, Mayor Bill de…

National

The best places to see the Northern Lights…

A large solar storm hit the Earth's atmosphere and will tonight illuminate the skies with aurora borealis -- also known as the Northern Lights.

Local

Police officer killed Sunday morning Bronx crash, 8…

One NYPD police officer was killed and eight other officers were injured early Sunday morning when the van they were traveling in crashed  in the…

National

Pennsylvania police shooter manhunt near home of suspect's…

A police manhunt intensified on Friday for the gunman who killed an officer and wounded another in an ambush at a Pennsylvania police barracks a week ago.

Television

'How to Get Away with' mischaracterizing Shondra Rhimes

Shonda Rhimes read Alessandra Stanley's New York Times piece about her being "an angry black woman" and "a romance writer" and it did not sit well with her.

Gossip

New nude celebrity selfies leak … and Clay…

A new batch of nude selfies of Rihanna, Kim Kardashian, Vanessa Hudgens, Lake Bell and Avril Lavigne hit the web and Clay Aiken has something to say!

Television

James Spader's route to villainy on "The Blacklist"

In honor of the second season premiere of "The Blacklist" tonight, where James Spader plays good guy/bad guy Raymond “Red” Reddington, it’s a good time to look back at Spader’s…

Television

True Detective

NFL

Jay Cutler takes Marc Trestman's coaching to heart

While Jay Cutler turned to an autobiography on the man who would be his head coach, Trestman had personal experience with the player.

NFL

Jets vs. Bears: 3 things to watch

Jets fans likely chalked up Monday's matchup with the Bears as a loss when the NFL schedule came out. But given their team's play so…

NFL

Rashad Jennings carries Giants in first win this…

Rashad Jennings, who came to New York from Oakland last year, by way of Jacksonville, was highly coveted this offseason by general manager Jerry Reese.

NFL

3 things we learned as Giants pick up…

The Giants picked up their first win of the season over the Texans.

Career

Here's how to make the most of visit…

You’re primped, you’re looking polished, you’re prepared with a stack of resumes. Job fair hunters, unite! There are a few things to keep in mind…

Education

Learn how to study effectively and stop cramming…

Picture this: It’s midterm week, and college students everywhere are trying to frantically memorize all of the math formulas, political theories and historical facts that…

Parenting

How motherhood inspired Bethenny Frankel's new book

Bethenny Frankel's new children's book is about how her daughter and dog didn't always get alone.

Parenting

A sneaky way to serve kids fruits and…

"My First Juices and Smoothies" gives smoothie recipes for kids.