Jobless claims drop for 2nd straight week as Sandy effect fades

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Reuters

The number of Americans filing new claims for unemployment benefits dropped for a second straight week last week, unwinding some of the storm-related surge, which has muddled the labor market picture.

Initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 393,000, the Labor Department said on Thursday. The prior week's figure was revised up to show 6,000 more applications than previously reported.

Economists polled by Reuters had forecast claims falling to 390,0000 last week. The four-week moving average for new claims, a better measure of labor market trends, increased 7,500 to 405,250, the highest level since October last year.

Superstorm Sandy, which ripped through the East Coast in late October, has distorted initial claims data in recent weeks, making it hard to get a clear pulse of the labor market.

A Labor Department official said there was no pronounced impact of the storm in last week's data, adding that claims also tended to be volatile around this time of year.

The labor market improved in October, with employers adding 171,000 jobs to their payrolls, up from 148,000 the prior month. Economists say stripping out the three states - New York Connecticut and New Jersey - hardest hit by the storm, new applications for state unemployment benefits have been steady.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid dropped 70,000 to 3.29 million in the week ended November 17. So-called continuing claims covered the week of the household survey from which the unemployment rate is derived.

The jobless rate increased by a tenth of a percentage point to 7.9 percent in October, as more Americans - including those who had given up the search for work - entered the labor market.

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The manufacturing sector shrinks for third straight month

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Production shrank at its sharpest clip in more than three years in August, the third month of contraction in a row, and companies hired the fewest workers since the end of 2009 a survey showed on Tuesday.

For supply management said, on that its index of national factory activity 49,6 in August fell Institute by 49,8 in July.

The reading fell shy of 50.0 average estimate in a Reuters poll of economists. A reading below 50 indicates contraction in the sector.

The index component employment fell its lowest level since November 2009 from 52,0 in July on 51,6.

"It is that the index of new orders again deteriorate without question a soft report on production and what is particularly worrying,", said Tom Porcelli, Chief U.S. economist for RBC capital markets. "It has become increasingly clear that the manufacturing sector is losing momentum." "This soft report payrolls leads in Friday will solidify when we see an other soft order report only additional measures the Fed."

New orders, a forward-looking sub-index fell to 47.1 in August, the worst result since April 2009. It amounted to 48 in July.

The exports index ticked up to 47 remained last month of 46.5 in July but in contraction, as recession in parts of Europe and slower growth in Asia to undermine demand U.S. were.

"Since everything we is international in terms of the demand by our label, a little slowdown expected tracks, especially with the euro zone still under pressure and emerging relatively experiencing growth, slowly", said Patrick O'Keefe, Director of economic research at j.j Cohn O'. "The domestic new orders for the production were a bit, but not robust so it is not unexpected somewhat more cautiously to see something."

Reuters contributed to this report.

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