The number of Americans filing first-time claims for unemployment insurance payments fell less than forecast last week, indicating recovery in the labor market is taking time to accelerate.
Applications for jobless benefits decreased 44,000 in the week ended May 7 to 434,000, Labor Department figures showed today. Economists forecast 430,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls rose, while those getting extended payments decreased.
A further decline in the number of firings accompanied by job gains elsewhere may shore up consumers’ confidence and boost average incomes, helping Americans overcome the strains of higher food and energy costs. U.S. payrolls have expanded for seven straight months, a sign the labor market is strengthening.
“These numbers are consistent with the consumer continuing to spend and the recovery continuing to gain traction,” said Conrad DeQuadros, a senior economist at RDQ Economics LLC in New York. “The only problem is that we’re digging out of a very deep hole in employment, so the unemployment rate will probably remain elevated.”
Other reports today showed retail sales rose in April, reflecting gains at service stations and grocery stores, and wholesale costs rose more than forecast.
Stocks and Treasuries fell after the reports. The Standard & Poor’s 500 Index declined 0.3 percent to 1,337.95 at 9:31 a.m. in New York. The yield on the benchmark 10-year Treasury note rose to 3.19 percent from 3.16 percent late yesterday.
Estimates for first-time claims ranged from 400,000 to 465,000 in the Bloomberg News survey of 44 economists.
The Labor Department initially reported the prior week’s applications at 474,000, elevated by events that seasonal variations failed to take into account. A spring break holiday in New York, a new emergency benefits program in Oregon and auto shutdowns caused by the disaster in Japan were the main reasons for the surge, a Labor Department spokesman said last week.
A Labor Department official said today there was a significant increase for initial jobless claims in Alabama related to damage from the tornadoes and storms. The official said that figure did not affect the national numbers.
The four-week moving average, a less-volatile measure, increased to 436,750 from 432,250, the highest since November.
The number of people continuing to collect jobless benefits rose by 5,000 in the week ended April 30 to 3.76 million. Economists forecast the number would fall to 3.7 million. The continuing claims figure does 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 17,000 to 4.1 million in the week ended April 23.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3 percent in the week ended April 30, today’s report showed. Thirty-one states and territories reported an increase in claims, while 22 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.
Federal Reserve Bank of New York President William C. Dudley said last week the recovery is falling short of the central bank’s goals even with job gains.
“Economic conditions have improved in the past year,” Dudley said May 6. “Yet the recovery remains moderate and we still have a considerable way to go to meet the Fed’s dual mandate of full employment and price stability.”
General Motors Co. said May 10 it will invest $2 billion in plants in eight U.S. states as it works to boost production and market share. About $1.8 billion of that investment would potentially create or save 4,000 jobs at 17 facilities, depending on completing local tax deals, the Detroit-based automaker said.