Meanwhile, weekly claims for unemployment benefits fell, in a sign that the nation’s labor market is on the rebound after the impact of a partial government shutdown on furloughed federal workers diminished.
The Institute for Supply Management said on Thursday that its Chicago business barometer jumped to 65.9 from 55.7, the strongest reading since March 2011 and substantially higher than the most optimistic forecast in a Reuters poll.
The Labor Department said initial claims for state unemployment benefits dropped by 10,000 to a seasonally adjusted 340,000 in the latest week.
The nation’s job market has apparently slackened in recent months, with private sector employers hiring fewer workers in October after the uncertainty caused by the federal budget showdown in diminished confidence among consumers and businesses.
Given that backdrop, analysts were skeptical about the supply management institute’s numbers.
“The report may be exaggerating the extent of economic growth momentum,” said Millan Mulraine, director of research at TD Securities.
Other recent figures on hiring, factory output and home sales in September have suggested that the economy lost ground even before the government shut down. Readings on consumer confidence last month have shown the fiscal standoff rattled households.
A 16-day partial shutdown of the federal government pushed up new jobless claims in recent weeks as furloughed workers applied for benefits, but this factor appeared to be diminishing. Claims filed by federal employees dropped 29,713 in the week ended Oct. 19 to 14,423. The shutdown ended on Oct. 17.
In addition, a Labor Department analyst said California, which had been dealing with a backlog of jobless claims because of computer problems, reported no carry-over in claims last week from previous weeks.
The four-week moving average for new jobless claims, considered a better measure of labor market trends, increased 8,000 to 356,250.
The government will issue its October’s employment report on Nov. 8. Payrolls gained 148,000 in September, with the unemployment rate hitting a near five-year low of 7.2 percent.
But if average monthly jobs growth continues at less than 150,000, where it has been for three months, it would be difficult for the jobless rate to fall further.
The shutdown could have affected the gathering of survey responses that form the basis of the jobless rate, resulting in a smaller sample that might undermine the accuracy of the report.
Article source: http://www.nytimes.com/2013/11/01/business/economy/business-activity-exceeds-predictions.html?partner=rss&emc=rss
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