Claims for U.S. jobless benefits fell last week and productivity cooled in the fourth quarter, signaling hiring may accelerate as companies reach the limits of how much efficiency they can wring from existing workforces.
Applications for unemployment insurance payments dropped by 12,000 to 367,000 in the week ended Jan. 28, according to Labor Department figures issued today in Washington. Worker output per hour increased at a 0.7 percent annual rate from October through December, down from a 1.9 percent gain in the prior three months, another report showed.
After focusing on cutting costs during the recession, American businesses are taking on more staff as they gain confidence the recovery will be sustained. In prepared remarks to Congress today, Federal Reserve Chairman Ben S. Bernanke today highlighted improvements in the job market and production, while cautioning the outlook remains “uncertain.”
“The labor market remains on a modestly improving trajectory,” said Richard DeKaser, deputy chief economist at Parthenon Group Inc. in Boston, who forecast 368,000 initial claims. “We are starting to move to the next phase of the labor market expansion, where hiring will increasingly overshadow layoffs.”
The drop in firings last week and Bernanke’s acknowledgment of the improvement helped lift most shares. The Standard & Poor’s 500 Index advanced 0.1 percent to 1,325.54 at the close in New York.
The median forecast of 46 economists in a Bloomberg News survey projected claims would drop to 371,000 from 377,000 initially reported for the prior week. Estimates ranged from 360,000 to 384,000. The Labor Department revised the previous week’s figure up to 379,000.
A report tomorrow may show employers boosted payrolls in January by 145,000 workers and the jobless rate held at an almost three-year low of 8.5 percent, according to the Bloomberg survey median estimates.
“Fortunately, over the past few months indicators of spending, production, and job market activity have shown some signs of improvement,” Bernanke said today, according to prepared testimony before the House Budget Committee. “The outlook remains uncertain, however, and close monitoring of economic developments will remain necessary.”
Bernanke spoke a week after the policy-setting Federal Open Market Committee said the outlook for the economy will probably warrant low interest rates through at least late 2014. The FOMC also committed to capping inflation at 2 percent, achieving Bernanke’s longstanding goal to reduce “public uncertainty” and anchor long-run expectations about monetary policy.
Elsewhere today, Spanish unemployment registrations jumped in January by the most in three years as the economy edged toward its second recession since the end of 2009, figures from the Labor Ministry in Madrid showed.
Australia’s trade surplus soared to a record in 2011 on coal and iron ore shipments, a Bureau of Statistics report showed in Sydney today. The data underscore the Reserve Bank of Australia’s expectation that Chinese demand for the nation’s commodities will help propel the domestic economy even as a global expansion slows.
The four-week moving average for jobless claims, a less volatile measure than the weekly figures, fell to 375,750 last week from 377,750. It was the second-lowest reading since 2008, bested only by the 374,000 reached in the last week of December.
A Labor Department spokesman said there was nothing unusual with last week’s data and no states’ data was estimated.
The number of people continuing to receive jobless benefits plunged by 130,000 in the week ended Jan. 21 to 3.44 million, the fewest since September 2008.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 43,100 to 3.5 million in the week ended Jan. 14.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
An improving job market may be helping underpin household sentiment. The Bloomberg Consumer Comfort Index rose to minus 44.8 in the week ended Jan. 29 from minus 46.4 the previous period. A measure of Americans’ view of the state of economy climbed to the highest level since June.
The productivity report also showed expenses per employee climbed at a 1.2 percent rate after falling 2.1 percent in the third quarter.
For all of 2011, productivity rose 0.7 percent, the smallest annual increase since 2008, when it rose 0.6 percent. The advance is smaller than the 2.5 percent increase on average from 2000 to 2010, indicating efficiency gains are getting harder to come by.
“In order to increase output, businesses, and manufacturers in particular, are just going to have to bring more people back,” said Robert Dye, chief economist at Comerica Inc. in Dallas. “They’re not going to get by only on technology in the short run. This is the backside of all the very robust productivity gains we had in 2008, 2009.”
Paccar Inc., the Bellevue, Washington-based maker of Kenworth and Peterbilt trucks, is among companies seeing the need to add staff.
Parts suppliers “have been able to feel a little more confident about hiring people back, maybe taking on a second shift, investing in some capacity, whatever their particular need is and just feeling a little bit better and as they go into 2012,” Mark Pigott, chief executive officer of Paccar Inc., said in a Jan. 31 conference call.
Paccar said it estimates U.S. and Canadian truck sales will rise by around 14 percent in 2012.