Interesting news
As I predicted, the number of new jobs needed each month to sustain new workers is down from the 150k mark, now pegged at 125-130k.
Ecnomists still downplaying oil, saying high job growth will keep the effect of high oil in check.
As I predicted, the number of new jobs needed each month to sustain new workers is down from the 150k mark, now pegged at 125-130k.
Ecnomists still downplaying oil, saying high job growth will keep the effect of high oil in check.
I wonder which 10 states reported an increase in jobless claims.Aug. 25 (Bloomberg) -- The number of Americans filing first- time claims for jobless benefits fell to 315,000 last week as companies held on to workers in an expanding economy.
Initial jobless claims declined by 4,000 in the week ended Aug. 20 from 319,000 the week before, the Labor Department said today in Washington. Claims have stayed below 320,000 for six straight weeks, the longest such run since 2000. Claims averaged 375,000 a week during the last five years.
Companies including Wal-Mart Stores Inc. are planning to hire new workers to meet demand even as record gasoline prices threaten to curb consumer spending. Businesses are also hiring more and firing less as worker productivity growth slows.
``This data supports the idea that payrolls will be strong again in August,'' said Ellen Beeson, an economist at Bank of Tokyo-Mitsubishi Ltd. in New York, who correctly forecast the decline to 315,000 claims. ``At some point employers are going to cut back on hiring if they can't pass along these higher energy prices. The fact that claims are still so low suggests that's not happening yet.''
Jobs
Employers will probably add 199,000 jobs in August, the median forecast of 20 economists surveyed by Bloomberg News. That would bring the total for the year to 1.54 million, ahead of the 1.5 million created during the same period of 2004, which was the best year for job creation since 1999.
Jobless claims in the 310,000 to 320,000 range suggest companies are adding about 220,000 new jobs a month, said Anthony Chan, senior economist at JPMorgan Asset Management in Columbus, Ohio. U.S. payrolls increased by 207,000 jobs in July. The economy needs to add 125,000 to 130,000 new jobs each month to keep pace with new workers joining the labor force, Chan said.
Jobless claims were expected to fall to 315,000, the median forecast in a Bloomberg News survey of 33 economists, from the 316,000 originally reported last week. Estimates ranged from 310,000 claims to 328,000.
The four-week average of claims, a less volatile measure, rose to 315,000 from 313,750, today's report showed.
The number of people continuing to collect state jobless benefits decreased to 2.578 million in the week ended Aug. 13 from 2.587 million the week before. The four-week moving average of continuing claims was the lowest since March 2001.
The insured employment rate, which tends to track the U.S. jobless rate, was unchanged at 2 percent. The Labor Department said 43 states and territories reported fewer claims, while 10 had more. These data are reported with a one-week lag.
Economic Growth
The pace of economic growth is expected to accelerate to 4.1 percent this quarter from 3.4 percent in the prior three months, according to a Bloomberg News economists' forecast completed Aug. 8. Housing continues to support faster growth. New home sales unexpectedly set a record in July, the Commerce Department reported yesterday.
Chan said oil prices above $50 a barrel may shave half a percentage point from the annual rate of economic expansion in the third quarter.
The average monthly oil price on the New York Mercantile Exchange has risen steadily since May. Crude oil for October delivery rose as much as 68 cents, or 1 percent, yesterday to a record $68 a barrel in after-hours electronic trading. It averaged $49.77 in May.
Oil
``When the economy is creating 200,000 new jobs a month, we can tolerate $65 to $70 a barrel oil,'' Chan said. ``It masks the impact on consumer confidence.''
The University of Michigan's gauge of consumer sentiment fell to 92.7 in August from 96.5 in July. The average retail price for all grades of gasoline this month rose to $2.50 a gallon from $2.33 during the same period in July, according to the U.S. Energy Department.
Economists track unemployment claims to gauge job creation because hiring typically accelerates as firing slows.
Average weekly claims fell 6.3 percent this year to 324,130 from the same period of 2004. Average monthly payroll gains rose 2.3 percent from a year earlier to 191,000.
The volume of help-wanted advertising in major U.S. newspapers unexpectedly increased last month, suggesting companies may be hiring more this summer, a Conference Board study today showed. The New York-based business research group said its gauge of advertising volume in 51 U.S. newspapers rose to 39 in July from 38 in June.
Productivity
``The claims data are telling us that the labor market is continuing to improve and growing at a rate of about 200,000 jobs a month,'' said Joseph Abate, a senior economist at Lehman Brothers Inc. in New York.
Companies are hiring more workers as efficiency gains wane. Productivity growth slowed to a 2.2 percent annual rate in the second quarter from 3.2 percent in the first three months of the year, the Labor Department reported earlier this month. Productivity growth averaged 3.4 percent since the end of the last recession in November 2001.
``Companies are looking to expand profits more now through sales growth than cost cutting,'' said Lynn Reaser, chief economist of the Investment Strategies Group at Bank of America in Boston.
Wal-Mart, the world's largest retailer, is expanding its operations to reach more consumers even as sales growth slows because of rising gasoline prices. The Bentonville, Arkansas- based company said this week it plans to build a new distribution center in Merced, California, that will create 600 jobs there.
Smaller Profit
The retailer reported its smallest quarterly profit gain in four years last week and cut its full-year earnings forecast, citing the effect of record-high gasoline prices.
``I do feel good about the economy,'' Wal-Mart Chief Executive H. Lee Scott, said Aug. 16. ``But I worry about the effect of higher oil prices. So I anticipate that we will face challenges as the year progresses.''
Not every company is expecting business to expand.
Eastman Kodak Co. said today it will shut two facilities at its Rochester headquarters and reduce manufacturing capacity at a film plant in China, eliminating 900 jobs, more than half in Rochester.
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