Superstorm Sandy weighs on US jobs market

The number of Americans who claimed unemployment insurance for the first time leapt last week, a sign that superstorm Sandy was taking its toll on the US economy, while consumer prices rose at the slowest pace in three months in October.

First time claim for jobless benefits jumped 78,000 to 439,000 in the week ending November 10 - the most since April 2011, the labour department reported.

The data came in above the previous week's upwardly revised figure of 361,000 and ahead of consensus forecasts of 376,000.

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Several states said the increase in new claims was due to the storm that battered the US east coast in late October, according to a labour department official.

Extreme weather can hold down filings initially as those affected are hampered by damage to their homes, power and water outages and transportation problems. Government officials and economists said it might take three to four weeks for the storm's impact to be fully realised in the weekly claims data.

The four-week average of new claims, which smooths out the volatility of the weekly data and is seen as a more accurate barometer of labour market trends, rose to 383,750, an increase of 11,750 from the prior week's upwardly revised average of 372,000.

"We knew there would be a hurricane impact on claims - last week it didn't happen but this week it most certainly did. It is going to be a problem for the next several weeks and the monthly payroll report will also be distorted for November," said Dwight Johnston, senior economist for the California and Nevada Credit Union Leagues. "But scraping away all the noise, average payroll growth is very steady".

Initial jobless claims reflect weekly firings and tend to fall as job growth - measured by the monthly non-farm payrolls report - accelerates.

Going into the storm, the labour market was showing signs of improvement. Economists say readings below 400,000 point to an increase in employment, with hiring outpacing lay-offs.

Continuing claims for jobless benefits climbed by 171,000 to 3.33m in the week ended November 3, the most in more than four years.

The number of people collecting emergency and extended payments decreased by about 33,300 to 2.12m in the week ended October 27.

Superstorm Sandy and its aftermath had a muted impact on the region's manufacturing sector.

The Federal Reserve Bank of New York's Empire State manufacturing index, which covers production in New York, northern New Jersey and southern Connecticut, posted another negative reading at minus 5.22 in November, compared with minus 6.16 in October. Economists had expected a level of minus 5.

Readings below zero indicate contraction.

The survey of roughly 175 manufacturing executives, which serves as one of the earliest monthly guideposts to US factory conditions, showed some signs of improvement. Shipments surged to a very strong 14.59 and new orders came in at 3.08, their first monthly increase since June. But the report included a big contraction in employment at minus 14.61

A separate data release from the labour department showed the cost of living rose at a slower pace in October, indicating US inflation is in check.

The headline consumer price index posted a 0.1 per cent increase, following a 0.6 per cent gain in September, a repeat of August, which was the largest rise since June 2009. The data came in line with expectations.

The Federal Reserve has said it is not concerned about a spike in inflation and is more focused on the other half of its dual mandate: maximum employment.

Core CPI, which excludes the volatile food and emerge components, increased 0.2 per cent, as expected, following a 0.1 per cent rise in September.

Among major components, energy dipped 0.2 per cent last month after posting a 4.5 per cent surge in September. This reflected a 0.6 per cent decline in petrol prices in October after a 7 per cent jump the previous month. Food prices rose 0.2 per cent, following a 0.1 per cent gain in September.