Though the new weekly figures are reported to be distorted due to Hurricane Sandy, the U.S. Department of Labor has reported a drop in unemployment claims by 8,000 last week equating to a seasonally adjusted 355,000 claims; an otherwise positive sign of an improvement in the market. The four week average of applications rose by 3,250 to reach 370,500. Weekly applications are expected to be affected by Sandy for up to a month. Applications are expected by most economists to rise after the aftermath of the storm has been cleared up.
Since hurricanes have traditionally pushed up applications by approximately 4 percent, if applications do not rise above 360,000 in the coming weeks, it would be a positive sign of an improvement job market. This would be a welcome change as employers have added only about 157,000 per month on average in 2012, enough only to lower the unemployment rate by 0.4 percent, and some of that decline is attributed to people giving up on their job searches. The total number of people receiving benefits for the week of October 14 was 5.1 million, a jump of 42,000 over the previous week.
Economic growth is expected to remain sluggish for the remainder of 2012 but hopes remain that growth will improve should the so-called fiscal cliff be avoided as tax increases and spending cuts arrive in early 2013. Otherwise, the effects could force the economy into a new recession.