Fewer Americans filed applications for unemployment benefits over the past month than at any time in the past three years, a sign the U.S. labor market is on the mend heading into the new year.
The four-week moving average for claims, a less volatile measure than the weekly figures, dropped to 375,000 last week, the lowest level since June 2008, Labor Department figures showed today in Washington. Applications (INJCJC) rose for the first time in a month in the week ended Dec. 24, climbing by a more-than- forecast 15,000 to 381,000.
The jump in claims last week may say more about their volatility during this time of year than about the state of the job market, according to economists like Eric Green. Their recent decline has stoked speculation the world’s largest economy was on the cusp of showing bigger gains in employment.
“The labor market is improving,” said Green, chief market economist at TD Securities Inc. in New York. “You should expect to see stronger payroll numbers going forward.”
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in March climbed 0.3 percent to 1,247.9 at 8:40 a.m. in New York.
A Labor Department spokesman said there was nothing unusual in the state-level data last week. Claims were estimated for six states and the District of Columbia as the holiday-shortened week prevented offices from completing their counts, the spokesman said. The estimates are usually close to the actual figures and therefore rarely lead to large revisions, he said.
The median forecast of 32 economists surveyed by Bloomberg News projected an increase to 375,000 from 364,000 initially reported for the prior week. Estimates ranged from 350,000 to 385,000. The government revised the previous week up to 366,000.
The number of people continuing to receive jobless benefits rose by 34,000 in the week ended Dec. 17 to 3.6 million. Those figures do not include the number of Americans receiving extended benefits under federal programs.
The number of workers who’ve used up their traditional benefits and are now collecting emergency and extended payments fell by about 7,800 to 3.5 million in the week ended Dec. 10.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, climbed to 2.9 percent from 2.8 percent, today’s report showed.
Twenty-three states and territories reported an increase in claims, while 30 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.
The economy generated 150,000 jobs in December, economists forecast the Labor Department’s monthly jobs report on Jan. 6 will show.
Financial services providers are among companies still trimming staff. Morgan Stanley (MS), the investment bank that said this month it will cut 1,600 jobs globally, may eliminate 580 of those positions in New York City, according to a filing this week with state labor regulators.
The “rolling layoffs” began Dec. 15, the New York-based firm said in paperwork submitted to the state’s Department of Labor.
Americans will be helped by Congress’ decision last week to pass a two-month payroll tax cut extension and continue expanded unemployment benefits. Yet fiscal policy uncertainty remains over whether the tax cuts will be extended for the full year and as debate continues over cutting the budget deficit by $1.2 trillion over 10 years.
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