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Sandy drives new claims for jobless benefits higher
Source: Agencies |
November 16, 2012, Friday
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SUPERSTORM Sandy drove new claims for jobless benefits in the US to an 18-month high last week, a sign the deadly storm could hold back economic growth by leaving tens of thousands of people temporarily out of work.
Initial claims for state jobless benefits rose 78,000 to a seasonally adjusted 439,000, the US Labor Department said yesterday. That was the highest level since April 2011 and well above the median forecast in a Reuters poll. It was also the biggest one-week increase in new claims since 2005.
"Stepping back from the storm distortions, the economy is growing at about 2 percent," said Ryan Sweet, senior economist at Moody's Analytics in West Chester, Pennsylvania. "We will likely see a step back in job growth ... because of Sandy. The economy is just muddling along."
An analyst from the Labor Department said several states from the mid-Atlantic and Northeast reported large increases in claims due to Sandy, a mammoth storm that slammed into the East Coast in late October.
The storm left millions of homes and businesses without electricity, shut down public transport and caused widespread damage in coastal communities. However, the economic impact of the storm is likely to be temporary.
Economists expect the storm could shave as much as half a percentage point from economic growth in the last three months of this year, but should be made up early next year.
Retail sales data on Wednesday pointed to a softening in US consumer spending early in the fourth quarter as Sandy slammed the brakes on auto purchases last month.
The four-week moving average for jobless claims, which smooths out volatility, rose 11,750 to 383,750. Economists generally think a reading below 400,000 points to an increase in employment.
CPI edges up
A separate report showed consumer prices edged higher last month as the cost of shelter jumped by the most in more than four years, while gasoline prices fell.
The Consumer Price Index rose 0.1 percent last month, in line with analysts' expectations, data from the Labor Department showed.
The data pointed to only modest inflation pressures that appear unlikely to derail the US Federal Reserve's plan to keep interest rates low for an extended period.
"I wouldn't say that core CPI is worrying at all," said David Sloan, an economist at 4Cast in New York.
Prices for shelter, which include rent, rose 0.3 percent during the month, the most since 2008, and accounted for more than half of the overall increase in the CPI.
Initial claims for state jobless benefits rose 78,000 to a seasonally adjusted 439,000, the US Labor Department said yesterday. That was the highest level since April 2011 and well above the median forecast in a Reuters poll. It was also the biggest one-week increase in new claims since 2005.
"Stepping back from the storm distortions, the economy is growing at about 2 percent," said Ryan Sweet, senior economist at Moody's Analytics in West Chester, Pennsylvania. "We will likely see a step back in job growth ... because of Sandy. The economy is just muddling along."
An analyst from the Labor Department said several states from the mid-Atlantic and Northeast reported large increases in claims due to Sandy, a mammoth storm that slammed into the East Coast in late October.
The storm left millions of homes and businesses without electricity, shut down public transport and caused widespread damage in coastal communities. However, the economic impact of the storm is likely to be temporary.
Economists expect the storm could shave as much as half a percentage point from economic growth in the last three months of this year, but should be made up early next year.
Retail sales data on Wednesday pointed to a softening in US consumer spending early in the fourth quarter as Sandy slammed the brakes on auto purchases last month.
The four-week moving average for jobless claims, which smooths out volatility, rose 11,750 to 383,750. Economists generally think a reading below 400,000 points to an increase in employment.
CPI edges up
A separate report showed consumer prices edged higher last month as the cost of shelter jumped by the most in more than four years, while gasoline prices fell.
The Consumer Price Index rose 0.1 percent last month, in line with analysts' expectations, data from the Labor Department showed.
The data pointed to only modest inflation pressures that appear unlikely to derail the US Federal Reserve's plan to keep interest rates low for an extended period.
"I wouldn't say that core CPI is worrying at all," said David Sloan, an economist at 4Cast in New York.
Prices for shelter, which include rent, rose 0.3 percent during the month, the most since 2008, and accounted for more than half of the overall increase in the CPI.
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