The number of Americans filing first-time claims for unemployment insurance fell to the lowest level since July 2008 last week, showing further strength in the labor market after the jobless rate declined to a 21-month low.
Applications for jobless benefits decreased by 36,000, more than forecast, to 383,000 in the week ended Feb. 4, Labor Department figures showed today. Economists forecast claims would fall to 410,000, according to the median estimate in a Bloomberg News survey. The total number of people receiving unemployment insurance fell, while those collecting extended payments increased.
A slowdown in firings means U.S. companies may begin creating enough jobs to keep unemployment going down after the rate’s biggest two-month decline since 1958. Federal Reserve Chairman Ben S. Bernanke yesterday said the jobless rate will likely stay high “for some time” as companies remain reluctant to add to payrolls.
“The labor market is improving,” said Brian Jones, an economist at Societe Generale in New York who projected claims would drop to 385,000. “Fingers crossed, if the weather can hold off this week, we should get a pretty decent snap back in non-farm payrolls and maybe another drop in the jobless rate.”
Futures on the Standard & Poor’s 500 Index expiring next month fell 0.5 percent to 1,312.80 at 8:34 a.m. in New York. The yield on the 10-year Treasury note, which moves inversely to price, rose to 3.68 percent from 3.65 percent late yesterday.
Estimates in the Bloomberg News survey of 51 economists ranged from 385,000 to 450,000. The Labor Department initially reported the prior week’s figure as 415,000.
A Labor Department official said the claims are still unwinding previous effects of bad winter weather.
The four-week moving average, a less volatile measure, fell to 415,500 from 431,500 the prior week.
The number of people continuing to collect jobless benefits fell by 47,000 in the week ended Jan. 29 to 3.89 million. Economists forecast the number would decline to 3.9 million. Figures for continuing claims do not include the number of workers receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by 84,000 to 4.64 million in the week ended Jan. 22.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.1 percent.
Eighteen states and territories reported an increase in claims, while 35 had a decrease.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Awaiting signs of sustained job creation, central bank policy makers are likely to keep interest rates near zero and press ahead with plans to buy $600 billion in Treasury securities to boost the pace of recovery.
Earlier this week a Labor Department report showed job openings in the U.S. decreased by 139,000 to 3.06 million, the fewest since September. The number of people hired also dropped along with the number of workers fired.
Employers added a fewer-than-forecast 36,000 jobs to payrolls in January as the unemployment rate unexpectedly fell to 9 percent, the lowest since April 2009, according to Labor Department figures released Feb. 4. Unemployment dropped to 9.4 percent in December from 9.8 percent the previous month.
Fed Chairman Bernanke told the House Budget Committee yesterday that while the declines in the jobless rate in December and January “do provide some grounds for optimism,” companies need to hire more to reduce joblessness.
“With employers reportedly still reluctant to add to their payrolls, it will be several years before the unemployment rate has returned to a more normal level,” Bernanke said.
President Barack Obama this week urged leaders of U.S. companies to create more jobs after he worked to improve the business climate. A free-trade agreement with South Korea, a deal to extend Bush-era tax cuts, and proposals to support infrastructure and innovation foster better conditions for business investment, Obama said in a Feb. 7 speech to the U.S. Chamber of Commerce.
“I’m hoping that all of you are thinking what you can do for America,” Obama said. “Ask yourselves what you can do to hire more American workers, what you can do to support the American economy and invest in this nation.”
Continental Airlines said Feb. 7 it will eliminate 500 jobs in Houston as it combines with United Airlines, moving its headquarters to Chicago from the Texas city where an estimated 3,000 people in management and administration are employed.
“We’re going through a careful process of trying to determine the right organizational structure and location for each department,” Julie King, a spokeswoman for Continental, said in an interview.