Fewer Americans filed applications for unemployment benefits last week, signaling limited progress in the labor market.
Jobless claims fell by 9,000 to 397,000 in the week ended Oct. 29, the fewest in a month, Labor Department figures showed today in Washington. The median forecast of 49 economists in a Bloomberg News survey called for a drop to 400,000. The total number of people on unemployment benefit rolls decreased to a six-month low.
Fewer dismissals, a precursor to bigger gains in payrolls, may help sustain the spending by households that accounts for about 70 percent of the economy. Federal Reserve officials yesterday projected that it will be 2013 before the jobless rate drops below 8 percent.
“The trend remains very constructive,” said Eric Green, chief market economist at TD Securities Inc. in New York, who forecast 395,000 claims. “It’s back below 400,000, which seems to be the pivot point in terms of a strengthening labor market as opposed to a weakening one.”
Stock-index futures extended gains and Treasuries fell after the report. The contract on the Standard & Poor’s 500 Index expiring next month climbed 0.8 percent to 1,243.5 at 8:44 a.m. in New York. The yield on the benchmark 10-year note rose to 2.04 percent from 1.99 percent late yesterday.
Workers productivity rose in the third quarter for the first time this year as companies tried to cut costs following a slowdown in growth, another Labor Department report today showed. The measure of employee output per hour increased at a 3.1 percent annual rate following declines in each of the previous two quarters. Expenses per employee fell at a 2.4 percent rate after a 2.8 percent gain in the second quarter of the year.
Jobless benefits applications were projected to decline from 402,000 initially reported for the prior week. Estimates in the Bloomberg survey ranged from 395,000 to 415,000. The Labor Department revised the prior week’s figure to 406,000.
A Labor Department spokesman said there was nothing unusual in the state data last week. Claims for two states, Connecticut and Oklahoma, were estimated.
Today’s data showed the four-week moving average, a less volatile measure than the weekly figures, fell to 404,500 last week from 406,500.
The number of people continuing to receive jobless benefits dropped by 15,000 in the week ended Oct. 22 to 3.68 million.
The continuing claims figure does not include the number of Americans 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 39,300 to 3.49 million in the week ended Oct. 15.
Fed policy makers, who refrained from taking any additional steps to ease monetary policy at their two-day meeting ended yesterday, said there are “significant downside risks to the economic outlook.”
“The Committee continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually,” the central bank said in a statement.
The Fed’s latest forecasts, also released yesterday, showed less optimism about the economy and employment in 2012 and 2013. Policy makers project growth next year of 2.5 percent to 2.9 percent, with unemployment in the 8.5 percent to 8.7 percent range. Joblessness in 2013 is forecast at 7.8 percent to 8.2 percent.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.9 percent, today’s report showed.
Thirty-six states and territories reported an increase in claims, while 17 reported a decrease. 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.
A report tomorrow may show employers added 95,000 workers to payrolls in October, following a 103,000 gain in September, according to the Bloomberg survey median.
Businesses paring their workforce include Motorola Mobility Holdings Inc., the mobile-phone maker that agreed to be bought by Google Inc. The Libertyville, Illinois-based company is cutting 800 jobs and closing some facilities, according to its regulatory filing last week.
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