http://www.bloomberg.com/apps/news?pid=20601068&sid=aK88c5ByIZbQ&refer=economy
U.S. Initial Jobless Claims Rose Last Week to 357,000 (Update2)
By Bob Willis
Nov. 30 (Bloomberg) -- The number of U.S. workers filing first-time applications for state unemployment benefits unexpectedly rose last week to the highest in more than a year.
Initial jobless claims increased by 34,000 to 357,000 in the week that ended Nov. 25, the highest since October 2005, the Labor Department said today in Washington. The four-week moving average, a less volatile measure, rose to 325,000 from 317,750.
Weekly claims figures were distorted by seasonal adjustments and temporary layoffs associated with the start of the holiday season, a Labor Department spokesman said.
Claims may creep higher in coming weeks as builders, mortgage brokers and other housing-related businesses cut staff in a slumping real-estate market.
``Even considering that the number might have been exaggerated by the seasonals, we believe this is starting to show the cooling in labor-market conditions,'' Elisabeth Denison, economist at Dresdner Kleinwort in New York, said in an interview.
Economists had forecast initial jobless claims would decline to 315,000 from the originally reported 321,000 for the prior week, according to the median of 34 estimates in a Bloomberg News survey. Estimates ranged from 310,000 to 330,000.
A separate report today showed personal spending in the U.S. rebounded last month, fueled by income growth. The 0.2 percent rise in spending amowed a 0.2 percent decrease in September, the Commerce Department said today in Washington. Incomes rose 0.4 percent, and the Federal Reserve's preferred measure of inflation increased 0.2 percent for a second month.
The benchmark 10-year Treasury note yielded 4.5 percent, down 2 basis points from yesterday, as of 8:44 a.m. in New York.
Total Benefit Rolls
The number of people continuing to collect state jobless benefits rose to 2.480 million in the week that ended Nov. 25 from 2.435 million in the prior week. The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, held at 1.9 percent.
Fifty-one states and territories reported an increase in new claims, with 12 of them citing layoffs in the construction industry, while two reported a decrease, the Labor Department said. Those numbers are reported with a one-week lag.
Initial jobless claims, which reflect firings, usually increase with slowing job growth, which is measured by the government's monthly non-farm payroll report.
Growth in non-farm payrolls so far this year has averaged 147,000 a month, compared with 165,000 a month last year, when the economy generated jobs at the second-fastest since 1999. Workers' average hourly earnings last month rose 3.9 percent from October 2005, close to September's five-year high of 4.1 percent.
Housing-Related Cutbacks
Builders shed 26,000 jobs in October, the most since February 2003, the Labor Department said on Nov. 3. Falling home sales are prompting homebuilders to reduce projects and hire fewer workers.
The economy grew at a 2.2 percent pace in the third quarter, pulled down by the biggest decline in 15 years in residential construction. Consumer spending grew at a 2.9 pace, the government said yesterday.
Among staff cutbacks linked to the housing slowdown, U.K.-based Wolseley Plc, the world's biggest supplier of plumbing and heating equipment, said Nov. 29 it cut 2,000 U.S. jobs after the slump in homebuilding reduced earnings.
Pfizer Inc., the world's largest drugmaker, plans to reduce its U.S. sales organization by 20 percent as it cuts costs to compensate for revenue lost to cheaper generic competition.
Members of the 11,000-person sales staff will be notified in December whether they are among those being fired, Pfizer spokesman Paul Fitzhenry said Nov. 28 in New York.
To contact the reporter on this story: Bob Willis in Washington
bwillis@bloomberg.net
Last Updated: November 30, 2006 08:50 EST