More Americans unexpectedly filed first-time claims for unemployment insurance last week, reflecting greater-than-normal volatility at the end of the quarter.
Applications for jobless benefits rose 27,000 in the week ended April 9 to 412,000, the most in two months, Labor Department figures showed today in Washington. Economists projected claims would be little changed at 380,000, according to the median estimate in a Bloomberg News survey. The increase in claims traditionally seen at the end of a quarter was larger than usual this year, a Labor Department spokesman said as the figures were released to the press.
The labor market is showing signs of strengthening as payrolls increase, which may help sustain gains in consumer spending. Unemployment that has fallen four consecutive months supports the view of Federal Reserve policy makers that the job market is showing signs of healing.
“Hiring will accelerate over the next few months,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “This is a temporary blip and the labor market will continue to heal.”
The number of people continuing to collect jobless benefits declined by 58,000 in the week ended April 2 to 3.68 million, the fewest since September 2008. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.
States often see a jump in claims between quarters as they review the number of workers receiving extended benefits, the Labor Department spokesman said. Anyone receiving such benefits who has also received some pay during the period are asked to file an initial claim, the spokesman said.
Another Labor Department report today showed the producer-price index climbed 0.7 percent from the prior month, less than the median forecast of economists surveyed by Bloomberg. The so-called core measure, which excludes volatile food and energy costs, increased 0.3 percent, more than projected.
Stock-index futures extended earlier declines on the unexpected increase in jobless claims. The contract on the Standard & Poor’s 500 Index maturing in June fell 0.6 percent to 1,300.8 at 8:49 a.m. in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 3.43 percent from 3.46 percent late yesterday.
Estimates for first-time claims ranged from 370,000 to 395,000 in the Bloomberg survey of 49 economists. The Labor Department initially reported the prior week’s applications at 382,000.
The four-week moving average, a less volatile measure, rose to 395,750 from 390,250.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 40,100 to 4.31 million in the week ended March 26.
The unemployment rate among people eligible for benefits, which tends to track the national jobless rate, fell to 2.9 percent in the week ended April 2 from 3 percent the prior week.
Thirty-two states and territories reported an increase in claims, while 21 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.
The unemployment rate in the U.S. unexpectedly fell to a two-year low of 8.8 percent in March as employers created more jobs than forecast, the Labor Department said April 1. Payrolls rose by 216,000 after a 194,000 gain in February.
As employment picks up, consumers have the resources to increase spending, encouraging companies to hire more workers.
“The job market in the U.S. is improving,” Jenny Lin, senior U.S. economist for Ford Motor Co., said on an April 1 conference call. “Consumer conditions are improving. Given the improving economic fundamentals, we feel comfortable at this time for the full-year industry sales, including medium and heavy trucks, to be in the range of 13 million to 13.5 million-unit range in 2011.”
The Fed yesterday said that the economy expanded at a “moderate” pace across much of the U.S. in February and March, led by manufacturing, with labor markets showing improvements in most regions.
“Most districts reported that labor market conditions were generally stronger than in their last reports,” the Fed said in its Beige Book report in Washington. “Wage pressures were reported to be mostly contained.”