U.S. Jobless Claims Edge Up Amid GM Strike, Factory Malaise

(Bloomberg) -- Filings for U.S. unemployment benefits rose to a four-week high, another sign of potential labor-market weakness ahead of Friday’s monthly jobs report, though part of the increase may reflect effects from a strike by General Motors Co. workers.

Jobless claims rose by 4,000 to 219,000 in the week ended Sept. 28, according to Labor Department figures released Thursday that exceeded the estimate in Bloomberg’s survey of economists. The four-week average, a less-volatile measure, held at the lowest in about two months while continuing claims fell to the lowest in almost a year.

Key Insights

• The third-straight rise in claims shows that a slowdown in manufacturing amid lower global demand and investment may be spreading into the labor market. At the same time, claims remain at tight enough levels to indicate still-solid employment, and the strike by GM workers may have played a role.
• The GM strike, which began Sept. 15, may have pushed up the number of people seeking benefits. Striking workers are generally not entitled to receive unemployment benefits, but still may file to receive them. Related industries and firms may have also felt the impact with about 46,000 union employees on strike across several states.
• State data support the idea that the strike is boosting filings. Ohio saw the largest increase in claims last week, with 2,179. In the prior week, the biggest rise was in Michigan, where claims climbed by 4,258 to 7,831 on manufacturing industry layoffs.
• The Labor Department’s September jobs report due Friday is forecast to show hiring rose in the month, though overall continues to trend down amid slower global demand.

What Bloomberg’s Economists Say

“As the strike drags into a third week, claims will continue to rise. While nearly 50,000 striking workers are generally not entitled to collect unemployment, tangentially related workers can receive them. Underlying labor market conditions are tight, but the impact of the strike will temporarily inflate the levels.”
--Eliza Winger
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• Continuing claims, reported with a one-week lag, fell 5,000 to 1.65 million in the week ended Sept. 21, the lowest level in nearly a year.
• The unemployment rate among people eligible for benefits held at 1.1%.
• Economists surveyed by Bloomberg had forecast that claims would rise slightly to 215,000.

--With assistance from Chris Middleton.

To contact the reporter on this story: Katia Dmitrieva in Washington at edmitrieva1@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle

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