- Ward McCarthy, chief financial economist at Jefferies LLC
The number of first-time jobless claims dropped more than expected in the week ended November 1, adding to signs companies are getting increasingly reluctant to lay off employees as the nation's economy strengthens. Initial claims for unemployment benefits dropped by 10,000 to a seasonally adjusted 278,000, the Labor Department reported. That was the second lowest reading this year, which also came in against economists' expectations for 285,000 claims. Applications for unemployment benefits for the previous week, however, were revised upwards to show a 288,000 gauge. The four-week moving average for initial claims, which strips out week-to-week volatility, declined 2,250 to 279,000, the lowest level since 2000. On top of that, the report also showed the number of people filing continuing claims for unemployment aid dropped by 39,000 to 2.35 million for the week ended October 25.
Jobless claims, a proxy for layoffs, have fallen sharply over the last year and are now at levels last regularly seen in 2006. Payrolls have rose an average 227,000 a month through September, putting 2014 on track to be the year of the strongest job growth since the late 1990s. Gross domestic product brose at a 3.5% seasonally adjusted annual rate in the third quarter. That was less than a 4.6% gain over the preceding three-month period, but still an above-average increase in the current expansion.
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