Applications for U.S. unemployment benefits decreased last week, a sign companies are cutting back on firings even as economic growth slows.
Initial jobless claims decreased by 16,000 to 453,000 in the week ended Sept. 25, lower than the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance and those getting extended payments fell.
As dismissals abate, employers also aren’t adding enough workers to reduce an unemployment rate that’s hovering near a 26-year high. A lack of job growth suggests consumer spending, the biggest part of the economy, will be slow to pick up in coming months.
“Employers are still kind of cautious,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who forecasted claims would fall to 455,000. “We need to regain that broader momentum in the economy, and something like that is just slow to develop.”
The world’s largest economy grew at a 1.7 percent annual rate in the second quarter, marking the start of a slowdown in growth that has concerned the Federal Reserve, revised figures from the Commerce Department also showed today.
The revised increase in gross domestic product exceeded the median forecast of economists surveyed, which projected a reading of 1.6 percent, unchanged from the government’s estimate issued last month. GDP grew 3.7 percent in the first three months of the year and 5 percent at the end of 2009.
Stock-index futures climbed after the reports, erasing earlier losses. The contract on the Standard & Poor’s 500 Index rose 0.3 percent to 1,144 at 8:47 a.m. in New York. Treasury securities also advanced, sending the yield on the benchmark 10-year note down to 2.47 percent from 2.51 percent late yesterday.
Claims were projected to fall to 460,000, according to the median forecast of 47 economists in the Bloomberg survey. Estimates ranged from 450,000 to 475,000. The Labor Department revised the prior week’s figure to 469,000 from 465,000.
The four-week moving average, a less volatile measure than the weekly figures, dropped to 458,000 last week from 464,250, today’s report showed.
The number of people continuing to receive jobless benefits fell by 83,000 in the week ended Sept. 18 to 4.46 million.
Smaller Benefit Rolls
The continuing claims figure does not include the number of Americans receiving extended and emergency benefits under federal programs. Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 293,000 to 4.88 million in the week ended Sept. 11.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.5 percent in the week ended Sept. 18 from 3.6 percent the prior week.
Forty-four states and territories reported an increase in claims, led by a 15,000 jump in California as government offices returned to a five-day work week following a holiday-shortened schedule the prior week. Nine states reported a decrease in the week ended Sept. 18.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Private employers in August added 67,000 workers while total payrolls fell by 54,000, the Labor Department said earlier this month. Unemployment rose to 9.6 percent last month, and economists surveyed by Bloomberg forecast joblessness will stay near that level for the rest of the year.
The economy is a top issue for voters in the November congressional elections, and polls show the public is increasingly skeptical of President Barack Obama’s performance. Earlier this week Obama signed legislation yesterday that will cut taxes and provide credit help for small businesses, calling it an essential step for job growth in a slow economy.
Some companies are still firing workers while others are hiring on a short-term basis.
Toys ‘R’ Us Inc., the world’s biggest toy retailer, plans to hire about 45,000 employees to cope with demand during the holiday season. The move is “essentially doubling” the domestic workforce, Wayne, New Jersey-based Toys ‘R’ Us said in a Sept. 28 statement.
Textron Inc., based in Providence, Rhode Island, said it plans to cut 700 jobs at its Cessna plane division, as the aircraft maker reduces production further because demand hasn’t yet picked up after the recession. The cuts represent about 8.3 percent of the unit’s workforce.