U.S. Initial Jobless Claims Fell 11,000 to 351,000 Last Week
Nov. 26 (Bloomberg) -- The number of Americans filing initial claims for unemployment benefits reached the lowest in almost three years as companies retain and add workers in an expanding economy, a government report showed.
Claims in the week that ended Saturday declined to 351,000 from a revised 362,000 the week before, the Labor Department reported in Washington. Last week's total was the lowest since 339,000 in the week ended Jan. 20, 2001.
``In the last six months, there has been a higher level of activity than we ever had at the company,'' said James Madden, chief executive of Exult Inc., an Irvine, California, provider of human resources management for companies including Bank of Montreal and Circuit City Stores Inc. ``There were five new clients added this year, and they all happened in a flurry. In 2002 we added one new client.''
The economy has created 286,000 jobs since August, the Labor Department previously reported, and payroll gains may cause consumer spending to accelerate next year, said Lynn Reaser, chief economist of Banc of America Capital Management in St. Louis, before the report.
Consumer spending, which accounts for 70 percent of the economy, grew at a 6.4 percent rate in the third quarter, and consumer confidence this month reached the highest in 14 months.
Economists had forecast the Labor Department would report jobless claims of 359,000 for last week, up from the previous week's initially reported 355,000, based on the median of 42 estimates in a Bloomberg News survey.
The four-week moving average, a less volatile measure, fell by 10,000 to 358,750, the lowest since 355,500 in the week ended Feb. 10, 2001.
Continuing Claims
Continuing claims dropped to 3.368 million in the week that ended Nov. 15 from 3.473 million a week earlier. The four-week average of those still on jobless rolls declined to 3.448 million, the lowest since March, from 3.491 million.
The insured unemployment rate, which tends to track the U.S. jobless rate, held at 2.7 percent in the week ended Nov. 15. States and territories reporting a rise in claims numbered 4, and those with decreases, 49.
Exult's Madden said in an interview yesterday that his company plans to hire 200 people over six months, augmenting its staff of 2,300. Exult signed a contract Nov. 10 with Circuit City to take over its payroll and benefits administration.
``Until the second quarter, we saw a lot of holdback and uncertainty on signing contracts,'' Madden said. ``Companies were unsure about the prospects for their own business.''
Fiserv's Hiring Plans
Fiserv Inc., which sells software and services to process checks and cash-machine transactions, is adding to its 21,000 employees, Les Muma, chief executive, said in an interview yesterday from Clearwater, Florida.
``Our organic growth is running, say, 5 to 6 percent'' annually, Muma said. ``That probably equates to employee base pickup of about 2 percent.''
Gross domestic product, the sum of all goods and services produced in the U.S., rose at an 8.2 percent annual rate from July through September. It may expand at a 4 percent rate in the fourth quarter, based on the median of 57 forecasts in a Bloomberg News survey of economists from Oct. 24 to Nov. 3. Increased business spending may drive growth.
``Broader hiring, reported primarily in residential construction, is surfacing,'' Federal Reserve Bank of Atlanta President Jack Guynn said Friday in a speech to the Atlanta Regional Commission. ``I expect additional hiring for permanent jobs as we move into 2004 and companies reach the limit of what they can accomplish by leveraging productivity.''
2% Job Growth?
Job growth will be just under 2 percent next year, which would bring down the average unemployment rate to 5.8 percent, according to a survey of 28 business economists reported earlier this week by the National Association for Business Economics. Last month, the jobless rate fell to 6 percent.
``The favorable trend in jobless claims and the rebound in consumer confidence for November should bode well for a pickup in consumer spending as we enter 2004,'' Banc of America Capital Management's Reaser said before the report.
Other companies still see room to trim their workforce and expenses. Autodesk Inc., whose software helped create special effects in the movie ``Spiderman,'' said yesterday it will fire as many as 650 workers, or 18 percent of its staff, and close offices to meet higher profitability goals.
''We're assuming modest growth in the economy next year, but even if revenue growth were higher than we're expecting, we would still be looking to eliminate some of these positions in order to get rid of the inefficiencies that exist in our business,'' Chief Financial Officer Al Castino said in an interview.
Autodesk, based in San Rafael, California, expects to hire 100 new employees next year to fill positions in areas it deems promising, Castino said without specifying.
Last Updated: November 26, 2003 08:30 EST |
