Fewer Americans than forecast filed applications for unemployment benefits last week, easing concern the job market was taking a turn for the worse.
Jobless claims fell by 27,000 to 365,000 in the week ended April 28, a one-month low, from a revised 392,000 the prior period, Labor Department figures showed today in Washington. The median forecast of 46 economists surveyed by Bloomberg News called for 379,000 applications.
The plunge in dismissals makes it more likely that the surge over the past three weeks was caused by the timing of the Easter holiday rather than a deterioration in employment. Federal Reserve policy makers last week said that while labor-market conditions have improved, the unemployment rate “remains elevated,” helping explain why they stuck to a plan to hold borrowing costs close to zero through 2014.
“The numbers allay some concern that the labor market is deteriorating,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who accurately projected the decrease in claims. “The Easter argument held.”
Stock futures climbed after the report. The contract on the Standard & Poor’s 500 Index maturing in June increased 0.3 percent to 1,401.8 at 8:44 a.m. in New York.
A report tomorrow may show the U.S. added 160,000 jobs in April, compared with a gain of 120,000 the previous month, according to the median estimate of economists surveyed by Bloomberg. The jobless rate held at a three-year low of 8.2 percent, the survey showed.
The productivity of U.S. workers fell in the first quarter, indicating businesses are reaching the limit of how much efficiency they can wring from the workforce, another report from the Labor Department also showed today. The measure of employee output per hour declined at a 0.5 percent annual rate, after a 1.2 percent gain in the prior three months.
Estimates for jobless claims in the Bloomberg survey ranged from 360,000 to 400,000. The Labor Department revised the previous week’s figure from 388,000. Last week’s plunge was the biggest since May 2011.
A Labor Department spokesman said there was nothing unusual in the data last week. The government often has difficulty adjusting the figures for seasonal variations around holidays like Easter that shift from year to year.
The four-week moving average, a less-volatile measure than the weekly figures, climbed to 383,500 last week from 382,750.
The number of people continuing to receive jobless benefits fell to 3.28 million in the week ended April 21 from 3.33 million.
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 decreased by about 62,300 to 3.08 million in the week ended April 14.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.6 percent in the week ended April 21. Thirty-six states and territories reported a decrease in claims, while 16 reported an increase. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
“Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated,” the Federal Open Market Committee said in an April 25 statement. “The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually. Consequently, the committee anticipates that the unemployment rate will decline gradually toward levels that it judges to be consistent with its dual mandate.”
Companies like H&R Block Inc., the biggest U.S. tax preparer, are still cutting workers. The Kansas City, Missouri-based firm said in a statement last week it plans to eliminate 350 jobs and close about 200 company-owned offices as part of a realignment.