Northwest Arkansas Democrat-Gazette
Fewer seek jobless benefits
Filings fall to 14-year low; factory output up in September.
WASHINGTON — The number of people seeking U.S. unemployment aid dropped to the lowest level in 14 years last week, the latest sign of a strengthening labor market that could help blunt worries about the effects of weak global growth.
The Labor Department said Thursday that weekly applications for unemployment aid fell 23,000 to a sea- sonally adjusted 264,000, the lowest level since April 2000. Given that the U.S. population has grown considerably since then, the proportion of the U.S. workforce applying for benefits is even smaller. Applications are a proxy for layoffs.
In separate economic reports Thursday, the Federal Reserve said manufacturing output rose in September, led by gains for aerospace products, furniture, clothing and plastics.
Analysts cheered the unexpectedly strong data. Ian Shepherdson, chief economist at Pantheon Macroeconomics, described the unemployment benefits report as “spectacular” and “astonishing.”
“Whether claims can be sustained at such a low level — an all-time low, as a share of payroll employment — is debatable … but this is a clear signal of real strength in the labor market,” he said in a note to clients.
The figures come as concerns about slowing global economic growth have roiled financial markets for the past week. A drop in U.S. retail sales, reported Wednesday, intensified the volatility. The Dow plunged 460 points early Wednesday before recovering, but still closed down 173 points. It was down 24.50 points Thursday.
The four-week average of applications, a less volatile measure, dropped 4,250 to
283,500, the lowest level since June 2000.
Consumers have remained cautious about spending even as employers have stepped up hiring. Retail sales fell 0.3 percent in September, the Commerce Department said Wednesday.
Still, employers added 248,000 jobs last month and hiring in the previous two months was healthier than previously believed, the government said earlier this month. That helped push the unemployment rate down to 5.9 percent, a six-year low.
The economy has added 2.64 million jobs in the past 12 months, the best annual showing since April 2006.
The number of available jobs soared to a 13-year high in August, according to a separate government report. That suggests employers will keep adding jobs at a healthy clip in the coming months.
Yet companies have been wary about filling positions, frustrating many job seekers. Some employers say they can’t find workers with the right skills. Many economists, however, say that firms may not be offering high enough pay to attract qualified applicants.
Despite the improved hiring, the job market remains scarred from the recession. More than 7 million people hold part-time jobs but want full-time work, up from 4.6 million before the downturn. And there are still twice as many people unemployed for longer than six months as there were before the recession, even though that figure has steadily declined in the past three years.
Factory production rose 0.5 percent in September after falling 0.5 percent in August. Over the past 12 months, manufacturing output has increased 3.7 percent, the Federal Reserve reported.
The continued pace of manufacturing output will likely be a bellwether for the broader economy.
“The manufacturing sector is still growing,” said Brett Ryan, U.S. economist at Deutsche Bank Securities Inc. in New York. “Order backlogs are high and they’ve been rising. That should support production over the next couple quarters.”
Job growth has been solid for much of 2014, yet the stock market has been hammered over the past week over concerns about Europe’s financial footing, the slowdown in China’s economy and Ebola surfacing in three continents. Stalled growth — if not the risk of recession — in much of Europe could cut into demand for U.S. exports.
Total industrial production surged 1 percent last month, as output from mines and utilities both increased.
Despite the gains, autos appear to have downshifted after driving much of the output growth of the past year. Factory production of motor vehicles and parts slid 1.4 percent in September, the second straight monthly decline after tumbling 7 percent in August.
Most economists expected a decline after auto production soared in July, largely because fewer plant shutdowns in July made output look stronger after the government adjusted the figure for normal seasonal variations. Information for this article was contributed by Christopher S. Rugaber and Josh Boak of The Associated Press and Lorraine Woellert of Bloomberg News.