Initial Unemployment Claims in U.S. Fall 16,000 as Labor Market Improves
Initial Jobless Claims in U.S. Fell 16,000 Last Week
Jonathan Alcorn/Bloomberg
Job seeker Hung Ly, right, fills out a job application at the Garden Grove Job Expo in Garden Grove, California.
Job seeker Hung Ly, right, fills out a job application at the Garden Grove Job Expo in Garden Grove, California. Photographer: Jonathan Alcorn/Bloomberg
March 1 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke speaks about the surge in oil and other commodity prices and the potential impact of the rising prices on the U.S. economy. Bernanke, in his semi-annual testimony before the Senate Banking Committee, says the rise probably won't cause a permanent increase in broader inflation and repeated borrowing costs are likely to stay low. (Excerpts. Source: Bloomberg)
March 15 (Bloomberg) -- Former Federal Reserve Bank of Richmond President Alfred Broaddus talks about today's Federal Open Market Committee statement that the U.S. economic recovery is gaining strength and higher energy prices will have a temporary effect on inflation. Broaddus, speaking with Carol Massar and Matt Miller on Bloomberg Television's "Street Smart," also discusses the Fed's asset purchase program and the outlook for monetary policy. (Source: Bloomberg)
Fewer Americans filed first-time claims for unemployment insurance payments for a third week in the last four, indicating progress in the labor market.
Applications for jobless benefits decreased 16,000 in the period ended March 12 to 385,000, in line with the median forecast in a Bloomberg News survey, Labor Department figures showed today. The four-week average of claims dropped to the lowest level since July 2008. The number of people on unemployment benefit rolls fell, while those getting extended payments rose.
Fewer firings along with increased hiring and a lower unemployment rate may help lift household spending, which accounts for 70 percent of the economy. Federal Reserve policy makers this week said the expansion is getting stronger and the labor market is “improving gradually.”
“As demand has picked up, and the labor component of the economy has been relatively tight, businesses are now seeking to add more to their employment ranks,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who correctly forecast the number of initial claims.
Economists projected 388,000 claims last week after a previously reported 397,000, according to the median estimate in the Bloomberg survey. Projections ranged from 375,000 to 400,000 in the survey of 44 economists.
Today’s report covers the week the Labor Department surveys businesses to calculate the monthly payroll figures. The four- week moving average, a less-volatile measure, declined to 386,250 from 393,250.
Stock Futures
Stock-index futures held gains after the reports. The contract on the Standard & Poor’s 500 Index rose 1.1 percent to 1,268.2 at 8:37 a.m. in New York. Treasuries fell, pushing up the yield on the benchmark 10-year note to 3.25 percent from 3.17 percent.
The number of people continuing to collect jobless benefits fell by 80,000 in the week ended March 5 to 3.71 million. Economists forecast the number would drop to 3.75 million, according to the Bloomberg survey. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 54,000 to 4.36 million in the week ended Feb. 26.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3 percent for a third week.
States, Territories
Forty-two states and territories reported an increase in claims, while 11 had a decrease in the week ended March 5. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Earlier this month, Fed Chairman Ben S. Bernanke told Congress that while economic growth will accelerate this year, he wanted to see a “sustained period of stronger job creation.”
U.S. central bankers this week reiterated his view during their second meeting of the year, reaffirming plans to buy $600 billion of Treasuries through June to boost growth. Fed officials said in a statement that “the unemployment rate remains elevated.”
Demand Effect
Retailers like Foot Locker Inc. (FL), the largest U.S. athletic shoe store chain, also said unemployment must keeping declining to sustain demand.
“As we begin 2011, there are encouraging signs that the U.S. economy is stabilizing,” Robert W. McHugh, chief financial officer at the New York-based company, said during a March 3 earnings call. “However, unemployment, while coming down slowly, remains high and there is risk that rising costs may continue to put downward pressure on overall consumer spending.”
Still, Bernanke said during his March 1 testimony to lawmakers that there are “grounds for optimism about the job market over the next few quarters, including notable declines in the unemployment rate in December and January, a drop in new claims for unemployment insurance, and an improvement in firms’ hiring plans.”
The jobless rate fell in February to 8.9 percent, the lowest since April 2009 and the third straight monthly decline, Labor Department figures showed March 4. More seasonable weather helped boost payrolls by 192,000, the most since May.
To contact the reporter on this story: Alexander Kowalski in Washington at akowalski13@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
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