Claims (INJCJC) for U.S. unemployment benefits dropped last week to the lowest level in four years, adding to recent reports showing signs of health in the economy.
Jobless claims fell 6,000 to 357,000 in the week ended March 31, the fewest since April 2008, the Labor Department reported today in Washington. The median forecast of 43 economists in a Bloomberg News survey estimated a decrease to 355,000. The number of people on unemployment benefit rolls also dropped, while those getting extended payments increased.
The improved labor market, rising stock prices and easier credit are lifting U.S. consumer confidence and spending, which accounts for 70 percent of the economy. A report tomorrow may show the world’s largest economy added more than 200,000 jobs in March for a third consecutive month, the longest streak of similar increases since late 1999 to early 2000.
“The labor market is going to continue to gradually heal, though we have a long ways to go,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The economy is pulling up pretty well given the headwinds we’re seeing from Europe.”
Stocks held earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in June dropped 0.3 percent to 1,389.3 at 8:45 a.m. in New York as a decline in Spanish bonds boosted concern the euro area has yet to contain its debt crisis.
Claims estimates in the Bloomberg survey ranged from 350,000 to 370,000. The four-week moving average, a less- volatile measure than the weekly figures, decreased to 361,750 last week, from 366,000.
Companies are retaining workers and hiring amid robust sales and growing consumer confidence. Manufacturing expanded at a faster pace in March from a month earlier, the Institute for Supply Management reported this week, and a measure of employment rose to the highest level since June. Cars and light trucks sold at a 14.3 million annual rate in March, capping the strongest quarter in four years.
The total number of people receiving jobless benefits fell by 16,000 in the week ended March 24 to 3.34 million.
In addition to the jobless claims, the number of Americans receiving extended benefits under federal programs increased by about 17,000 to 3.26 million in the week ended March 17.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.6 percent, today’s report showed.
Twenty-six states and territories reported a decline in claims, while 27 reported an increase. These data are reported with a one-week lag.
“The good news is that the industry and consumers have been very resilient in the face of higher pump prices. The steadily improving economy is playing a role and so is pent-up demand and an improved credit market,” Johnson said in a call with analysts this week.
A report from ADP Employer Services found that company payrolls grew by 209,000 in March, with employment expanding in all major sectors of the economy.
“A wide range of indicators suggests that the job market has been improving, which is a welcome development indeed,” Federal Reserve Chairman Ben S. Bernanke said last week. “Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks.”
Tomorrow’s report from the Labor Department on total payrolls, which includes government workers, is projected to show a gain of 205,000 in March, according to a median forecast of economists surveyed by Bloomberg. The jobless rate is projected to hold at a three-year low of 8.3 percent.
To contact the reporter on this story: Lorraine Woellert in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Christopher Wellisz at email@example.com