Clear77° WeatherClear77° Weather

Fewer auto closings reduce U.S. unemployment claims

WASHINGTON — The number of people seeking U.S. unemployment benefits plunged last week. But a big reason was that some automakers skipped their traditional summer shutdowns to keep up with demand, leading to fewer temporary layoffs of autoworkers.

Sales of new cars and trucks surged in June, extending the auto industry's rebound. Automakers also began their Independence Day promotions early, lifting sales at the end of the month.

Weekly applications for unemployment aid dropped 26,000 to a seasonally adjusted 350,000, the Labor Department said Thursday. That's the lowest level since March 2008. The four-week average, a less volatile measure, fell to 376,500.

Economists expect most of the decline to be reversed in the coming weeks.

"Take July with a grain of salt," said Jill Brown, an economist at Credit Suisse, in a note to clients. The auto shutdowns "often cause extreme volatility."

Automakers traditionally close their plants for the first two weeks in July to prepare them to build new models and their employees file for unemployment benefits. But Ford Motor Co. said in May that it would reduce its usual two-week closing to only one week. And Chrysler said May 3 that it would skip the shutdown entirely.

Fewer auto closings reduce U.S. unemployment claims 07/12/12 [Last modified: Thursday, July 12, 2012 10:57pm]

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...