More Americans than forecast filed applications for unemployment benefits last week, a sign the labor market is improving in fits and starts.
Jobless claims increased by 14,000 to 348,000 in the week ended Feb. 22, exceeding all forecasts in a Bloomberg survey and the highest level in a month, from 334,000 in the prior period, a Labor Department report showed today in Washington. A Labor Department spokesman said no states were estimated and there was nothing unusual in the data.
Cold temperatures and winter storms have damped progress in the housing and labor market, indicating growth slowed in the first two months of the year. More seasonable weather will probably help the world’s largest economy rebound in coming months, leading to further gains in employment.
“We still have a fairly constructive view on the labor market,” said Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC in New York, whose claims forecast of 345,000 matched the highest estimate in a Bloomberg survey. “There have been some weather-related setbacks in hiring, but as it warms up, you’re going to see much better performance in labor market activity.”
The median forecast of 53 economists surveyed by Bloomberg projected 335,000. Estimates ranged from 325,000 to 345,000. The prior week’s claims were revised down to 334,000 from an initial reading of 336,000.
Another report today showed orders for durable goods fell less than forecast in January, a sign manufacturing was beginning to emerge from the harsh winter weather that blanketed the nation.
Stock-index futures pared losses after the reports. The contract on the Standard & Poor’s 500 Index expiring in March fell less than 0.1 percent to 1,841.1 at 8:58 a.m. in New York, after declining as much as 0.5 percent.
The 1 percent decrease in bookings for goods meant to last at least three years followed a revised 5.3 percent slump in December that was larger than previously estimated, according to data from the Commerce Department. The median estimate in a Bloomberg survey called for a 1.7 percent decline. Orders for non-military capital goods excluding aircraft, a proxy for business investment, improved.
Today’s Labor Department data showed the four-week average of claims, a less-volatile measure than the weekly figure, was unchanged at 338,250.
Winter storms have weighed on recent economic data. A report from the Commerce Department earlier this month showed retail sales declined in January by the most since June 2012, falling 0.4 percent after a 0.1 percent drop in December.
The economy added 113,000 jobs in January, missing the 180,000 median estimate of economists surveyed by Bloomberg, after a gain of 75,000 in December, Labor Department figures showed this month.
A weather-related increase in firings may hurt consumer confidence, raising the risk that the cooling in spending will persist.
“It is possible that the economy has lost some momentum beyond bad weather, and that momentum loss encouraged employees to shed workers,” John Herrmann, director of U.S. rate strategy at Mitsubishi UFJ Securities USA Inc. in New York, said before the report. “Jobless claims need to be watched carefully to see if they suggest that some other weakness is present.”
The number of people continuing to receive jobless benefits increased by 8,000 to 2.96 million in the week ended Feb. 15, today’s report showed.
Forty-eight states and territories reported a decrease in claims, while five reported an increase. The unemployment rate among people eligible for benefits held at 2.3 percent. Both pieces of data are also report reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically wane before employment growth picks up.
Sluggish growth in the housing market has prompted firings at some companies. New York-based JPMorgan Chase & Co., the biggest U.S. bank, said this week it will eliminate about 8,000 jobs in consumer and mortgage banking units in 2014 as fewer customers refinance their loans.
Federal Reserve policy makers are focusing on the job market to help them determine when, and by how much, to reduce stimulus. Boston Fed President Eric Rosengren yesterday said the central bank should be patient in removing accommodation because of persistent damage to the labor market.
His remarks echo Fed Chair Janet Yellen’s view that the job market has yet to make a full recovery from the longest and deepest recession since the Great Depression. She said in Feb. 11 congressional testimony that the recovery in employment is “far from complete.” Yellen plans to testify to the Senate Banking Committee today.