Applications (INJCJC) for unemployment benefits in the U.S. were little changed last week as an improving economy prompted businesses to retain staff.
Jobless claims rose by 4,000 to 302,000 in the week ended Aug. 30, a Labor Department report showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg called for 300,000. The total number of people on benefit rolls fell to the lowest level in more than seven years.
A stronger pace of hiring is helping brighten Americans’ moods about the labor market and limiting filings for unemployment pay. Businesses holding the line on firings also will continue to add to staff at a rate of more than 200,000 a month, economists project ahead of August payroll data released by the Labor Department tomorrow.
“Layoff activity is very low,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who correctly projected the claims reading. “Companies have a need for the current people on the books and are looking to hire more.”
Another report today showed the trade deficit in the U.S. unexpectedly narrowed in July to the lowest level in six months as exports climbed to a record.
The gap shrank 0.6 percent to $40.5 billion, the smallest since January, from a revised $40.8 billion in June that was narrower than previously estimated, the Commerce Department reported. The median forecast in a Bloomberg survey of 65 economists called for a widening to $42.4 billion. Sales to foreign customers climbed 0.9 percent on growing demand for American autos and petroleum products.
Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing this month climbed 0.3 percent to 2,004.8 at 8:48 a.m. in New York after the European Central Bank unexpectedly cut interest rates and announced a bond-buying program to stimulate growth.
There was nothing unusual in the claims data and no states were estimated, a Labor Department spokesman said as the figures were released.
The median forecast of 49 economists surveyed by Bloomberg projected the number of claims would be little changed at 300,000 last week. Estimates ranged from 290,000 to 315,000.
The four-week average of claims, a less-volatile measure than the weekly figure, climbed to 302,750 from 299,750 in the prior week.
The number of people continuing to receive jobless benefits dropped by 64,000 to 2.46 million in the week ended Aug. 23, the fewest since June 2007. The unemployment rate among people eligible for benefits held at 1.9 percent during that period, today’s report showed.
More muted firings typically pave the way for acceleration in job growth. Economists estimate employers added more than 200,000 workers to payrolls in August for a seventh straight month, adding to a streak that’s at its longest since 1997, according to the Bloomberg survey median ahead of tomorrow’s Labor Department release.
Employment rose in July by 209,000 after a 298,000 advance the prior month. The jobless rate rose to 6.2 percent from an almost six-year low of 6.1 percent as more Americans entered the labor force seeking work.
The progress is boosting views of the prospects for finding employment. The share of consumers who said jobs were “plentiful” jumped in August to the highest level since March 2008, Conference Board data showed last week.
Further labor market gains may be needed to boost companies’ spirits about consumer demand, including at Nashville-based Kirkland Inc., a home accessory retailer.
“We would still prefer a better jobs environment and a housing market to feel more comfortable with the state of the consumer,” Chief Executive Officer Robert Alderson said on an Aug. 21 earnings call. “Sustained economic optimism and predictable growth are required to produce both.”
Uneven progress in the employment picture is keeping the Fed on track to end monthly bond-buying in October, while still holding interest rates at record lows.
“Five years after the end of the recession, the labor market has yet to fully recover,” Fed Chair Janet Yellen said in an Aug. 22 speech at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming.
Two-thirds of indicators that Yellen has said she monitors to judge the health of the labor market haven’t yet returned to pre-recession strength. A still-elevated level of underemployment, record-low workforce participation and the rate of workers who are secure enough to quit their jobs are among the gauges that remain weaker than 2004-07 averages.
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