WASHINGTON (AP) — The number of people applying for unemployment benefits fell sharply last week as a temporary spike caused by Hurricane Sandy faded. Weekly first-time jobless claims have fallen back to a level consistent with modest hiring.
The Labor Department said Thursday that applications for unemployment benefits dropped 25,000 last week to a seasonally adjusted 370,000.
New unemployment claims surged a month ago after the storm forced businesses to close in the Northeast. Applications jumped to 451,000 in the week that ended Nov. 10. People can claim unemployment benefits if their workplaces are forced to close and they are not paid.
Some analysts were encouraged by how quickly new jobless claims returned to pre-storm levels. Pierre Ellis, an economist at Decision Economics, said the rapid drop suggested that companies were quickly rehiring workers displaced by the storm. Rebuilding and repair efforts could also be creating jobs, he said.
The early impact of Hurricane Sandy could still be seen in the four-week average of new unemployment applications. It rose to 408,000 last week.
Before the storm hit on Oct. 29, new jobless claims had fluctuated this year from 360,000 to 390,000. They were above 400,000 for most of last year. That has coincided with only modest declines in the unemployment rate.
The impact of Hurricane Sandy is also likely to depress November’s employment figures, which the government will report on Friday. And fears over looming tax increases and government spending cuts also may have dragged on job gains last month.
Economists were forecasting on average that employers added 110,000 jobs in November, according to FactSet. And they predicted that the unemployment rate would remain at 7.9 percent. But some analysts expected much lower job gains, roughly 25,000 to 50,000, because of the storm and anxiety over the fiscal crisis.
Jobless Claims Drop as Storm’s Effects Fade
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Jobless Claims Drop as Storm’s Effects Fade
