Fewer Americans than forecast filed first-time claims for unemployment insurance last week, a signal the U.S. labor market is maintaining its recent progress.
Applications for jobless benefits increased by 2,000 to 336,000 in the week ended March 16, Labor Department figures showed today. Economists projected 340,000 claims, according to the median estimate in a Bloomberg survey. The monthly average, which smoothes the week-to-week volatility, dropped to the lowest level since February 2008.
Dismissals have waned since the end of 2012 as employers maintain headcounts to meet a pickup in demand from business customers and consumers. Today’s figures support the view of Federal Reserve policy makers that the labor market is beginning to show signs of improvement.
“Claims are really encouraging,” said Michelle Girard, a senior U.S. economist at RBS Securities Inc. in Stamford, Connecticut, who forecast 337,000 initial applications. “We’ve seen what I would characterize as a meaningful improvement, which is consistent with and corroborates the other better employment data.”
Stock-index futures remained little changed after the figures, with the contract on the Standard & Poor’s 500 Index expiring in June falling less than 0.1 percent to 1,548.7 at 8:48 a.m. in New York.
Estimates for first-time claims ranged from 325,000 to 352,000 in the Bloomberg survey of 47 economists. The prior week’s applications were revised to a seven-week low of 334,000 after an initially reported 332,000.
A Labor Department official said as today’s data were released that there was nothing unusual that affected today’s figures. No states or U.S. territories estimated claims in the latest week.
The four-week moving average of claims, a less-volatile measure, dropped to a five-year low of 339,750 from 347,250.
The number of people continuing to collect jobless benefits rose by 5,000 to 3.05 million in the week ended March 9. 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 136,000 to 1.78 million in the week ended March 2.
The unemployment rate among people eligible for benefits held at 2.4 percent in the week ended March 9. Thirty-three states and territories reported a decrease in claims, while 20 reported an increase.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Payrolls increased by 236,000 workers in February after growing by 119,000 in January, according to Labor Department figures released earlier this month. The jobless rate dropped unexpectedly last month to 7.7 percent, the lowest level since December 2008, from 7.9 percent.
Fed policy makers yesterday said they will continue to buy securities at a pace of $85 billion a month to spur economic growth and reduce unemployment.
The Fed “continues to see downside risks to the economic outlook,” according to the Federal Open Market Committee’s statement. It also said “labor market conditions have shown signs of improvement in recent months but the unemployment rate remains elevated.”
When asked yesterday at a press conference following the announcement whether the progress is close to warranting a slowing in the pace of asset purchases, Fed Chairman Ben S. Bernanke said policy makers need to see persistent strength in the labor market.
“One thing we would need to be sure is that this is not a temporary improvement,” Bernanke said. “An improvement criterion is not just the improvement we have seen but is it going to be sustained.”
Among companies reducing staff, BlackRock Inc., the world’s biggest money manager, said March 19 that it is cutting about 300 jobs now and in coming months. AstraZeneca Plc, the U.K.’s second-biggest drugmaker, said March 18 it will cut 650 positions in the U.S.