Fewer Americans than forecast filed applications for unemployment benefits last week, indicating the labor market is improving.
Jobless claims declined by 9,000 to 323,000 in the week ended Aug. 31, less than the lowest estimate of economists surveyed by Bloomberg, from a revised 332,000, according to Labor Department data issued today in Washington. Another report showed productivity climbed more than previously estimated in the second quarter.
Employers are holding the line on dismissals, setting the stage for a pickup in hiring to meet any acceleration in demand as the effects of federal budget cuts and higher payroll taxes begin to wane. Growth in employment and rising incomes will help sustain consumer spending, which accounts for about 70 percent of the economy.
“We are seeing significant improvement in claims,” said Yelena Shulyatyeva, an economist at BNP Paribas in New York, who projected the number of applications would come in at 325,000, matching the lowest in the Bloomberg survey. “What we need to see is more progress on the hiring side.”
Companies boosted employment by 176,000 workers in August, figures from the Roseland, New Jersey-based ADP Research Institute also showed today. The median forecast of 43 economists surveyed by Bloomberg called for a 184,000 gain. Estimates ranged from increases of 150,000 to 225,000.
Stock-index futures were little changed after the reports. The contract on the Standard & Poor’s 500 Index maturing this month rose 0.1 percent to 1,655.1 at 8:48 a.m. in New York.
The median forecast of 50 economists surveyed by Bloomberg called for jobless claims of 330,000. Estimates ranged from 325,000 to 345,000. The Labor Department revised the previous week’s figure to 332,000 from an initially reported 331,000.
Last week’s reading was just shy of the 322,000 reached three weeks earlier that was the lowest since January 2008.
Three states were estimated last week as government offices were closed on Sept. 2 for the Labor Day holiday. The states’ data arrived late and were in line with the Labor Department’s projections, indicating the delayed figures wouldn’t have impacted last week’s drop, a government spokesman said as the report was released to the press.
The measure of employee output per hour increased at a 2.3 percent annualized rate from April through June after a 1.7 percent decline in the prior three months, another Labor Department report showed. The gain in worker productivity exceeded the median forecast in a Bloomberg survey of economists that called for a 1.6 percent advance. The increase in efficiency last quarter was initially reported as 0.9 percent.
The data also showed expenses per worker were unchanged in the second quarter compared with a previously estimated 1.4 percent increase.
Even with the pickup last quarter, productivity rose 0.3 percent in the 12 months ended in June, below the average 2.4 percent annual gain in the 2000-2011 period. Companies are reaching the limit of how much efficiency they can squeeze from their existing staff, a sign they may add workers when demand accelerates.
The jobless claims report showed the four-week moving average, a less volatile measure than the weekly figures, declined to 328,500 last week, the lowest since October 2007, from 331,500.
The number of people continuing to receive jobless benefits declined by 43,000 to 2.95 million in the week ended Aug. 24. 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 decreased by about 17,000 to 1.49 million in the week ended Aug. 17.
The unemployment rate among people eligible for benefits held at 2.3 percent in the week ended Aug. 24.
Twenty-seven states and territories reported a decline in claims, while 26 reported an increase. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate.
Companies expanding include Dearborn, Michigan-based Ford Motor Co. (F), the second-largest U.S. automaker, which plans to have an additional shift of 1,400 new workers at a Flat Rock, Michigan, plant to boost capacity for its Fusion sedan.
The employment report for August, due from the Labor Department tomorrow, may show payrolls climbed by 180,000 after July’s 162,000 gain that was the smallest in four months, according to the Bloomberg survey median. The jobless rate probably held at a more than four-year low of 7.4 percent.
Federal Reserve officials, set to meet Sept. 17-18, are watching the job market along with other economic data to determine when to begin scaling back the central bank’s $85 billion in monthly asset purchases. Policy makers in July affirmed a pledge to continue bond buying until they saw signs the outlook for the labor market has “improved substantially.”
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