Nov. 21, 2012 at 8:30 AM ET
Fewer Americans filed for unemployment benefits in the latest week, according to government data Wednesday that still suffered the after-effects of Superstorm Sandy on the Northeast.
The Labor Department reported that new jobless claims fell a seasonally-adjusted 41,000 to 410,000. The four-week moving average, which smooths out some of the wrinkles in the data, rose 9,500 to 396,250. The data was released a day earlier than usual because government offices will be closed Thursday for the Thanksgiving holiday.
The storm, which slammed the East Coast, killed over 100 in the U.S. and destroyed thousands of homes and businesses, and left millions without electricity, has elevated the claims data. It's likely to continue to do so for another week, at least. The storm caused nearly 44,000 people in New York and 31,000 in New Jersey to seek unemployment aid two weeks ago, the latest state data available.
Before the storm, applications fluctuated between 360,000 and 390,000 for most of this year. At the same time, the unemployment rate fell from 8.3 percent to 7.9 percent.
The storm has distorted a range of economic indicators, making it harder to gauge the underlying health of the U.S. economy. Economists thought Wednesday's readings nevertheless point to a struggling jobs market.
"There appears to be a noticeable deceleration of growth in the fourth quarter," said Peter Hooper, an economist at Deutsche Bank in New York. "It would not be surprising if some of the new jobless claims are due to underlying weakness in the labor market," he said.
The data covers the same week when the department collects data for its estimate on hiring during the month, and gives some reason to expect softness in that report due on December 7, although not all analysts expect a significant impact. Nonfarm payrolls grew 171,000 in October.
"We are expecting things to be in the neighborhood of what we have seen, maybe with a pullback in light of the hurricane," said Bricklin Dwyer, an economist at BNP Paribas in New York.
The drop in new claims only partially unwinds the 90,000-claim increase registered the prior week. The Labor Department revised upward its estimate for new claims in the week ending Nov 10 to 451,000. Millan Mulraine, an economist with TD Securities in New York, said the storm would continue to distort claims for another few weeks.
However, most analysts think the economic impact of the storm is likely to be temporary.
Growth in the U.S. economy has looked uneven in recent months, with business investment sagging due to fears that Congress will slash the budget deficit next year, while consumer spending and the housing market have looked more robust.
The Associated Press and Reuters contributed to this report.