(Updates with markets in fifth paragraph.)
Sept. 1 (Bloomberg) -- Applications for U.S. unemployment benefits fell last week as the influence of the strike at Verizon Communications Inc. waned.
Jobless claims fell by 12,000 to 409,000 in the week ended Aug. 27, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop to 410,000, according to the median forecast. The figure remains higher than it was three weeks earlier, before the labor dispute at Verizon pushed the numbers up.
Companies like American Superconductor Corp. are stepping up job cuts, which may prompt consumers to pull back on the spending that accounts for about 70 percent of the economy. A report tomorrow may show employers added 70,000 workers to payrolls in August, down from 117,000 the prior month, and the jobless rate held at 9.1 percent, according to the median forecast in a Bloomberg survey.
“Claims are still quite elevated, which shows the U.S. job market remains very soft,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, who had forecast claims would drop to 408,000. “There’s still a lot of nervousness about how the global economy is playing out. Growth in the U.S. is not enough to bring down the unemployment rate significantly.”
Jobless benefits applications were projected to fall from the 417,000 initially reported for the prior week, according to the median forecast of 46 economists in a Bloomberg survey. Estimates ranged from 400,000 to 420,000.
Treasuries rose and stocks fell after the report. The Standard & Poor’s 500 Index dropped 0.1 percent to 1,217.67 at 9:32 a.m. in New York. The yield on the benchmark 10-year note fell to 2.20 percent from 2.22 percent late yesterday.
There were no special circumstances affecting last week’s claims data, a Labor Department spokesman said as the figures were released, adding that there was no indication that striking workers at Verizon influenced the numbers.
The number of jobless claims stood at 399,000 in the period ended Aug. 5, the week before some of the roughly 45,000 workers on strike at Verizon started filing for benefits.
A second report from the Labor Department today showed the productivity of U.S. workers fell more than previously estimated in the second quarter, pushing up labor costs from 2010’s record low. The measure of employee output per hour decreased at a 0.7 percent annual rate, the second straight quarterly drop, revised figures showed. Expenses per employee climbed at a 3.3 percent rate.
Today’s data showed the four-week moving average, a less- volatile measure than the weekly figures, rose to 410,250 last week from 408,500.
The number of people continuing to receive jobless benefits fell by 18,000 in the week ended Aug. 20 to 3.74 million. The prior week’s reading was revised up to 3.75 million from a prior estimate of 3.64 million.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 38,000 to 3.68 million in the week ended Aug. 13.
The unemployment rate among people eligible for benefits held at 3 percent in the week ended Aug. 20, today’s report showed.
Twenty-seven states and territories reported a decrease in claims, while 26 reported an increase. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Tomorrow’s forecast gain in payrolls would compare with 117,000 in July which brought the average increase over the past three months to 111,000. That was about half the 204,000 increase on average in the first four months of the year.
Federal Reserve Chairman Ben S. Bernanke, speaking at the annual central bank symposium last week in Jackson Hole, Wyoming, said the Fed still had tools at its disposal to stimulate the economy even as he declined to specify which measures it might use.
“It is clear that the recovery from the crisis has been much less robust than we had hoped,” Bernanke said. “Economic growth has, for the most part, been at rates insufficient to achieve sustained reductions in unemployment.”
Job cuts have accelerated as recent data showed the economy slowed more than previously reported in the first half of the year. American Superconductor, a global power technologies company, announced Aug. 11 that it plans to cut about 150 jobs to better align costs with revenue expectations.
“These workforce reductions are necessary to maintain the health of the business,” said Daniel McGahn, chief executive officer of the Devens, Massachusetts-based company. “Expenses have been reduced in virtually all departments, levels and major geographies.”
Solyndra Inc., a maker of solar modules that received a $535 million loan guarantee from the U.S. Energy Department, dismissed 1,100 employees this week as it suspended operations, citing economic and industry conditions. Fremont, California- based Solyndra said it will seek Chapter 11 protection.
“Regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion,” Solyndra’s President and Chief Executive Officer Brian Harrison said in a statement Aug. 31.
--With assistance from Chris Middleton in Washington. Editor: Carlos Torres
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