Washington, DC, United States (4E) – Initial applications for unemployment benefits in the U.S. declined in the second week of October, though jobless claims continue to stay high due to processing delays in the state of California and job losses caused by the government shutdown.
In the week ended Oct. 12, jobless claims fell by 15,000 to 358,000 from a revised reading of 373,000 in the previous period, according to a Labor Department report released Thursday in Washington. The median estimate of 46 economists predicted a 335,000 decrease, according to a Bloomberg News survey.
Applications in California stayed high and last week’s reading accounted for layoffs of some non-federal workers as a result of the political battle in Washington, according to a Labor Department spokesman as the report was released.
Over the past month, the average of new claims – a more reliable measure than the weekly figures -jumped by 11,750 to 336,500, the highest level since late July.
Wednesday’s decision by Congress to raise the borrowing limit and fund the government into 2014 will put hundreds of thousands of federal workers back to their posts and may lead to the recall of non-federal contractors that had been dismissed.
The infighting in Washington, however, could slow down the labor market as employers would wait on the sidelines on its impact on the economy.