While initial weekly unemployment claims have for the most part remained flat this year, Hurricane Sandy caused a sharp increase in the 4-week moving average reported Wednesday, as claims increased significantly in the impacted areas.
For the week ended on November 17, the Labor Department reported that the advance figure for seasonally adjusted initial claims was 410,000, a decrease of 41,000 from the previous week. In comparison, the 4-week moving average was 396,250, and increase of 9,500 from the previous week’s average. In particular, an increase in hiring led to lower unemployment rates in 37 states last month, with only seven states reporting that unemployment had risen.
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Labor Department officials have said that the storm will likely affect unemployment benefit applications through the end of November. The storm, which hit the East Coast on October 29, caused 8 million homes in 10 states to lose power. With additional power outages closing many businesses as well, many workers are claiming benefits for the period when their workplaces were closed.
According to Bloomberg, before Superstorm Sandy, weekly applications had wavered between 360,000 and 390,000, while employers have added an average of 157,000 jobs per month. However in October, employers added 171,000 jobs; a sign that the job market is improving. So far this year, unemployment is down a full percentage point.
Yet Federal Reserve Chairman Ben Bernanke said that the job market was far from healthy in a speech on Tuesday. “The unemployment rate is still well above both its level prior to the onset of the recession and the level that my colleagues and I think can be sustained once a full recovery has been achieved,” he said.
Economic forecasts for the October-December quarter expect a growth rate of 2 percent, a rate too low to improve unemployment, Bloomberg reported.
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