Fewer Americans filed claims for unemployment benefits last week, indicating employers are slowing the pace of firings as the economic outlook improves.
Jobless claims decreased by 9,000 to 346,000 in the week ended June 22 from a revised 355,000 the prior period, the Labor Department reported today in Washington. The median estimate in a Bloomberg survey of economists called for 345,000 claims.
Smaller reductions in headcounts indicate employers are confident enough that demand will be sustained as the housing market improves and consumers grow more optimistic. Bigger gains in sales may encourage companies to step up hiring and help reduce an unemployment rate the Federal Reserve says “remains elevated.”
“The broad trend still remains lower” for jobless claims, said Jacob Oubina, senior economist at RBC Capital Markets LLC in New York. “That’s going to continue to support net payroll gains.”
Stock-index futures maintained gains after the data on jobless claims and another report showing consumer spending rebounded in May. The contract on the Standard & Poor’s 500 Index expiring in September rose 0.6 percent to 1,604.7 at 8:41 a.m. in New York.
Household purchases, which account for about 70 percent of the economy, rose 0.3 percent after a 0.3 percent decline the prior month that was the biggest since September 2009, according to the Commerce Department’s figures. Incomes advanced 0.5 percent, more than projected.
Estimates (INJCJC) in the Bloomberg survey of 49 economists ranged from 330,000 to 365,000 after a previously reported 354,000 in the previous week.
No states were estimated and there was nothing unusual in the data, a Labor Department spokesman said as the figures were released.
The four-week moving average, a less-volatile measure than the weekly figures, dropped to 345,750 last week from 348,500.
The number of people continuing to receive jobless benefits was little changed at 2.97 million in the week ended June 15.
That continuing claims figure doesn’t include Americans receiving extended benefits under federal programs. The number of job seekers who have exhausted traditional benefits and are relying on emergency and federal extended aid rose by about 23,000 to 1.71 million in the week ended June 8.
The unemployment rate among people eligible for benefits held at 2.3 percent in the week ended June 15, today’s report showed.
Thirty-nine states and territories reported a decrease in claims and 14 reported an increase, according to data that are reported with a one-week lag.
Applications for jobless benefits, which track firings, typically fall before job growth can accelerate. Employers in the U.S. added 175,000 jobs in May. The unemployment rate rose to 7.6 as more Americans, perhaps buoyed by improved prospects, began job hunting.
Some businesses are seeking to keep good workers with bigger paychecks. Home Depot Inc (HD). last year paid $195 million in bonuses to hourly employees in its 795 northern U.S. stores to boost retention and customer service, division president Aaron Flowe said.
“Oftentimes I’m asked, ‘So, as the economy improves and companies start to thrive again, do you worry about associates leaving?’” Flowe said at a June 19 conference. “Sure I do, because I do believe that as more opportunities are out there, people will consider other things.”
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