More Americans than projected filed first-time claims for unemployment insurance last week, a sign the improvement in the labor market will take time to develop.
Applications for jobless benefits increased by 25,000 to 410,000 in the week ended Feb. 12, exceeding the 400,000 median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today. The total number of people receiving unemployment insurance was little changed, while those collecting extended payments decreased.
A reduction in firings by U.S. firms is needed to keep unemployment going down. Bigger job gains are needed to boost consumer spending, which accounts for 70 percent of the world’s largest economy.
“As a lot of industries see improvement in demand there’s not an opportunity to make further cuts,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “We will break below the 400 level on a sustained basis before the end of the first quarter.” He said the overall trend is “still good.”
Another Labor Department report showed the cost of living climbed for a seventh consecutive month in January, led by higher prices for fuel and food that that may be starting to filter through to other goods and services.
The consumer-price index increased 0.4 percent for a second month, more than the 0.3 percent median increase estimate of economists surveyed by Bloomberg. The so-called core rate, which excludes volatile food and fuel costs, rose 0.2 percent, the biggest gain since October 2009.
Stock-index futures dropped after the reports. The contract on the Standard & Poor’s 500 Index maturing in March fell 0.2 percent to 1,330.2 at 8:48 a.m. in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 3.57 percent from 3.62 percent late yesterday.
More Than Forecast
Jobless claims estimates in the Bloomberg survey of 47 economists ranged from 370,000 to 450,000. The Labor Department revised the prior week’s two-year low to 385,000 from 383,000.
Today’s report covers the week the Labor Department surveys businesses to calculate the monthly payroll figures. The four-week moving average, a less volatile measure, rose to 417,750 from 416,000 the prior week. The average was also up from the 413,000 in last month’s survey week, indicating little letup in firings.
The number of people continuing to collect jobless benefits rose by 1,000 in the week ended Feb. 5 to 3.91 million. These figures 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 decreased by about 85,000 to 4.5 million in the week ended Jan. 29.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.1 percent for a third week.
Thirty-two states and territories reported a decrease in claims, while 21 had an increase.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
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 until they see signs of sustained job creation.
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.
Home Depot Inc., the world’s largest home-improvement retailer, this week said it is hiring more than 60,000 temporary workers in the U.S., as well as adding permanent employees for the second year in a row.
The Atlanta-based company is boosting staff as it prepares for the biggest selling season of the year, March through mid-June, Craig Menear, executive vice president of merchandising, said in a telephone interview Feb. 14.
“It is about driving traffic,” he said.
Other companies are cutting workers. 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.