Unemployment rates fell or were unchanged in all 50 U.S. states in November, evidence that hiring is improving across the country.
Initial claims for state unemployment benefits decreased 42,000 to a seasonally adjusted 338,000, the Labor Department said on Thursday. The Labor Department says employers added jobs in 43 states and cut jobs in just seven. California, Texas and Indiana reported the largest job gains.
Analysts had expected U.S. jobless claims to fall by 35,000 to 345,000 last week from the previous week’s revised total of 380,000, which was the highest since March. Continuing jobless claims in the week ended December 14 rose to 2.923 million from 2.877 million in the preceding week. Analysts had expected continuing claims to decline to 2.827 million.
“Companies have been holding on to workers and are now a getting a bit more active on hiring,” said Omair Sharif, an economist at RBS Securities Inc. in Stamford, Connecticut, who projected 340,000 claims.
A Labor Department analyst said there were no special factors affecting the data. Still, the number of claims around the winter holiday season tends to be volatile. Holidays and big swings in unadjusted data toward the end of the year can complicate seasonal adjustments for jobless claims, and many economists caution against reading too much into the figures during the period.
“This is a welcome sign in the right direction,” said Lindsey Piegza, an economist with Sterne Agee, though she said the “next “clean” claims report won’t be for weeks.”
“With labor markets on the mend and consumer confidence on the rise, we look for broader economic improvement to continue pushing claims (lower),” said Gennadiy Goldberg, an analyst at TD Securities in New York.
New claims have trended higher since September. Economists, however, say the level of claims is still consistent with job growth, and other labor market indicators have pointed to a strengthening labor market.
The four-week moving average was 348,000, an increase of 4,250 from the previous week’s average of 343,750. The monthly average is seen as a more accurate gauge of labor trends because it reduces volatility in the week-to-week data.
Citing an improving labor market, the Federal Reserve earlier this month announced it would reduce its monthly $85 billion bond buying program by $10 billion starting in January. Payrolls increased solidly in October and November. The unemployment rate dropped to a five-year low of 7.0 percent in November.
The White House and Democrats in Congress are pressing for an extension of the program. But many Republicans oppose another round of extended benefits, citing the cost and potential incentive for people to continue getting the benefits over taking a new job, reports Nasdaq.
Fed officials also raised their assessment of the outlook for the job market, predicting the unemployment rate will fall as low as 6.3 percent by the end of next year, compared with a September projection of 6.4 percent to 6.8 percent.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 46,000 to 2.923 million in the week ended December 14, says Reuters.