Jobless claims declined by 34,000 to 407,000 in the week ended Nov. 20, Labor Department figures showed today in Washington. New filings for unemployment benefits in the U.S. dropped more than expected last week to the lowest level in two years, data from the Labor Department revealed Wednesday morning.
Fewer firings lay the groundwork for a pickup in job creation that will generate incomes and spur consumer spending, which accounts for 70 percent of the economy. Even with companies firing fewer workers, unemployment will be slow to decline, according to the Federal Reserve’s latest forecast in which policy makers also lowered their growth projections.
“The labor market is clearly improving,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “We’re seeing consistent job gains in the private sector. This suggests we’ll have a good holiday spending season.”
Consumer spending rose in October for a fifth month as a rebound in incomes lifted the biggest part of the U.S. economy at the start of the final quarter of 2010, Commerce Department figures showed today.
Below are the states reporting the biggest changes in unemployment claims. The figures are for the week ended Nov. 13, one week behind the national data:
States with the biggest drops in claims:
California: Down 5,044, due to a holiday-shortened government workweek and fewer layoffs in services
Pennsylvania: Down 4,494, due to fewer layoffs in the construction, services and furniture industries
North Carolina: Down 2,685, due to fewer layoffs in construction, services, and textiles
Texas: Down 2,632, due to a shorter workweek and fewer layoffs in services and transportation
Wisconsin: Down 2,416, no reason given
Georgia: Down 2,257, due to fewer layoffs in construction, services and manufacturing.
New Jersey: Down 2,062, due a shorter workweek and fewer layoffs in transportation and warehousing
State with the largest increase:
Indiana: Up 2,094, due to layoffs in the auto industry
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