Jobless Claims Down as Growth Remains Steady
BY Angus Loten
Sept. 29, 2005--Jobless claims fell last week after a surge in hurricane-related applications, the Department of Labor reported Thursday, though economists still expect this year's storm season to curb production and hiring as economic growth remains steady in the months ahead.
In contrast to lower consumer confidence levels reported earlier this month, the rosier outlook for the rest of the year reflects a continuing update mood among small business owners, market watchers said.
"From what we're seeing small businesses are growing," said Todd Rosin, a spokesman for Bank of America. "Loans are up, deposits are up, and people are using cash managing services. From a small business perspective, things are very strong," Rosin said.
Their optimism seems to be rubbing off.
First-time claims for jobless benefits filed last week dropped to 356,000, down from 435,000 the previous week and below Wall Street forecasts, the report showed. The decline, of some 79,000 claims, was the steepest since August 1992.
Of those claims, about 60,000 were linked to Hurricane Katrina, nearly half as many as the previous week. The biggest increases in first-time claims in the week ending Sept. 17 were reported in Gulf Coast states, with Louisiana and Mississippi alone accounting for an extra 25,000 applications.
Over the same period, claims were also up in California, which on top of storm-related job losses saw widespread layoffs in the service industry.
The total number of people drawing jobless benefits was 2.802 million the week ending Sept. 17, up from 2.658 million the previous week.
The latest figures were unaffected by Hurricane Rita, which slammed into Texas on Sept. 23. The Congressional Budget Office expects both storms to take a full percentage point off gross domestic product growth in the second quarter, knocking some 400,000 jobs off the market and contributing to a general decline in consumer confidence.
Despite strong consumer spending and business development, weaker than-expected exports of services and inventory-building kept economic growth flat in the second quarter, U.S. Department of Commerce figures released Thursday showed.
Real GDP, the output of all goods and services produced in the U.S., grew at an annual rate of 3.3%, down from 3.8% at the beginning of the year, according to the department's Bureau of Economic Analysis. The growth rate has stayed above 3% for the last nine quarters. Small business accounts for well over half of GDP, according to the National Federation of Independent Business.