U.S. jobless claims fall, mid-Atlantic manufacturing expands

WASHINGTON/NEW YORK Thu Oct 17, 2013 1:14pm EDT

Job seekers line up as they wait for an interview during the 8th job forum dedicated to recruiting in Nice February 14, 2013. REUTERS/Eric Gaillard

Job seekers line up as they wait for an interview during the 8th job forum dedicated to recruiting in Nice February 14, 2013.

Credit: Reuters/Eric Gaillard

WASHINGTON/NEW YORK (Reuters) - U.S. jobless claims fell last week and mid-Atlantic factory activity kept growing in October, but a just-ended government shutdown as well as computer issues affecting the claims report impeded the data's value as signposts for the economy.

Initial claims for state unemployment benefits fell 15,000 to a seasonally adjusted 358,000, the Labor Department said on Thursday, slipping from a six-month high the prior week. But the figure was still elevated as California continued to deal with a backlog related to computer problems.

Economists polled by Reuters had expected first-time applications to fall to 335,000 last week.

"Jobless claims are still dealing with a lot of computer glitches and other temporary factors. It's hard to extract anything meaningful from them," said Lindsey Piegza, chief economist with Sterne Agee & Leach in Chicago.

California's technical problems have been dragging on for a few weeks, but should be transitory. The effects of the recent squabbling in Washington were unclear.

The federal government shut down for the first half of October as Republicans refused to fund government operations without major concessions by the Democrats on President Barack Obama's signature healthcare act, passed three years ago.

That shutdown - along with the threat of default as the nation threatened to hit its borrowing limit - faded with an 11th-hour spending deal by Congress on Wednesday. The deal will fund the government through mid-January and raise the country's borrowing authority until February 7.

A Labor Department analyst said there had not been a perceptible increase in filings last week from non-federal workers furloughed because of the government shutdown.

During the week ended October 5, the first week of the shutdown, there were 70,068 claims from furloughed federal workers. Claims for federal workers are reported separately and with a one-week lag.

Though claims rose last week, the underlying trend remains consistent with a gradually healing labor market.

The four-week moving average for new claims, which irons out week-to-week volatility, rose 11,750 to 336,500.

A separate report showed business activity in the mid-Atlantic region expanded this month, but more slowly than in September.

The Philadelphia Federal Reserve Bank said its business activity index slipped to 19.8 in October from 22.3 in September. The October figure was still well above economists' expectations for a reading of 15.0.

The survey has now been positive for five straight months. Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.

"This is kind of surprising given what's been happening in Washington," said Scott Brown, chief economist with Raymond James in St. Petersburg, Florida. "I want to see another month of this. The key economic story was that it was going to be stronger were it not for the government."

Nevertheless, survey respondents said their outlook remained bright. The six-month business conditions index rose to 60.8, the highest level since September 2003, from 58.2 last month.

(Reporting by Luciana Lopez in New York and Lucia Mutikani in Washington; Additional reporting by Richard Leong in New York; Editing by Andrea Ricci)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (6)
Has anyone thought of giving small business a tax break for hiring unemployed people. I mean they do not have to pay any taxes at all. On the other had greatly increase the tax on business who do not hirer unemployed. Want to end the unemployment issues this will do it.

Oct 17, 2013 9:30am EDT  --  Report as abuse
Bugzy wrote:
The solution is simple and plain but hey if their ain’t any poor folks, problems then the government will lose its shine and will have to reduce its size. Salary ratio can reduce unemployment better than the stupid FED’s QE infinity. You can’t have 20 top executives earning what 10,000 unemployed can live on. Train people on the job, college is not all the important….bill, Steve, zucker never finished the crap anyway. USA don’t need to spend so much money on war machines that will never be used. War will not happen so why waste money on machines that will be outdated rot very soon. USA can rely on its allies come rain or sunshine to defend or invade. So come on Obama, just admit it White House ain’t what you hoped it was so you just went with the flow, threw CHANGE out of the window and turned into a puppet.

Oct 17, 2013 10:05am EDT  --  Report as abuse
disenwit wrote:
I think I’m going to take the job I was offered and then yell at the manager and get fired so I can get another 2 years of unemployment. Beats working at Walmart!!!

Oct 17, 2013 10:48am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Recommended Newsletters

Reuters U.S. Top News
A quick-fix on the day's news published with Reuters videos and award-winning news photography and delivered at your choice of one of four times during the day.
Reuters Deals Today
The latest Reuters articles on M&A, IPOs, private equity, hedge funds and regulatory updates delivered to your inbox each day.
Reuters Technology Report
Your daily briefing on the latest tech developments from around the world from Reuters expert tech correspondents.