The number of Americans filing applications for unemployment benefits rose more than forecast last week after reaching a six-month low, a sign that progress in the labor market remains fitful.
Jobless claims increased 16,000 in the period ended March 29 to a five-week high of 326,000, the Labor Department reported today in Washington. A revised 310,000 applications were filed in the previous week, the fewest since Sept. 7. The median forecast of 52 economists surveyed by Bloomberg called for 319,000 claims.
A slowdown in layoffs from earlier this year may set the stage for additional hiring as demand rebounds from a weather-induced soft patch. Figures tomorrow are projected to show companies took on more workers in March than at any time in the last four months.
“Layoffs are still very, very low,” said Ryan Sweet, senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, and the best forecaster of claims over the past two years, according to data compiled by Bloomberg. “Claims are pointing toward an improvement in the job market. It’s evidence that the economy’s struggles this year were temporary.”
Economists’ estimates in the Bloomberg survey ranged from 310,000 to 335,000 after a previously reported 311,000 in the previous week. Today’s report included annual revisions for the seasonal adjustment factors for the jobless claims data from 2009.
Other figures showed the U.S. trade deficit reached a five-month high in February. The gap widened 7.7 percent to $42.3 billion as exports declined and imports increased, the Commerce Department said. The value of American shipments to South and Central America dropped to a three-year low.
Stock-index futures were little changed after the reports. The contract on the Standard & Poor’s 500 Index maturing in June rose 0.1 percent to 1,884.3 at 8:45 a.m. in New York.
The four-week average of claims, a less-volatile measure than the weekly figure, was little changed at 319,500 from 319,250 the week before.
The number of people continuing to receive jobless benefits rose by 22,000 to 2.84 million in the week ended March 22.
The unemployment rate among people eligible for benefits climbed to 2.2 percent in the week ended March 22 from 2.1 percent the prior week, today’s report showed.
Forty-two states and territories reported a decrease in claims, while 11 reported an increase in the week ended March 22.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate. A Labor Department report due tomorrow is forecast to show payrolls rose by 200,000 in March, the most since November, the median estimate in a Bloomberg survey showed.
Federal Reserve Chair Janet Yellen highlighted the job market in a speech this week, saying that the recovery “still feels like a recession to many Americans.”
“The numbers of people who have been trying to find work for more than six months or more than a year are much higher today than they ever were since records began decades ago,” Yellen said at a conference in Chicago. “While there has been steady progress, there is also no doubt that the economy and the job market are not back to normal health.”
Even as the economy improves, some employers are holding the line on hiring as they put efforts into boosting productivity. Specialty retailer Toys ‘R’ Us Inc. has reduced its workforce this year as it tries to rein in costs amid “disappointing” earnings, Chief Executive Officer Antonio Urcelay said.
“We took some actions this year already, some of them are very painful, honestly, because to eliminate jobs is not nice, it is not something we like to do,” Urcelay said on a March 26 earnings call. “But we don’t believe there are many other alternatives.”
Financial services companies continue to shrink payrolls five years after the end of the recession. Bank of America Corp. dismissed employees in its global trading and investment banking divisions last month and Deutsche Bank AG is weighing reductions to its staff.