The number of Americans filing for unemployment benefits was little changed last week near the lowest level in seven years as employers held on to staff in an improving economy.
Claims decreased by 1,000 to 298,000 in the week ended Aug. 23 from 299,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 46 economists surveyed by Bloomberg called for an increase to 300,000.
Claims have been hovering near the lowest levels since 2007 as the labor market continues to make progress. Now, it’s up to hiring to cut slack enough to force employers to raise pay, which, in turn, could spur more household spending.
“Businesses are feeling better about the economic outlook,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York, who correctly projected the jobless claims number at 298,000. “The improvement in the job market is also helping with consumer confidence.”
Estimates in the Bloomberg survey ranged from 280,000 to 315,000. The prior week’s claims were revised up from an initial reading of 298,000.
Another report today showed the world’s largest economy expanded more than previously forecast in the second quarter, propelled by the biggest gain in business investment in more than two years. Gross domestic product, the value of all goods and services produced, rose at a 4.2 percent annualized rate, up from an initial estimate of 4 percent and following a first-quarter contraction, Commerce Department figures showed.
After the data were released, stock-index futures held earlier losses. The contract on the Standard & Poor’s 500 Index maturing in September declined 0.3 percent to 1,990.6 at 8:51 a.m. in New York as concern over Ukraine intensified.
The four-week average of claims, a less-volatile measure than the weekly figure, declined to 299,750 from 301,000 the week before.
The number of people continuing to receive jobless benefits climbed by 25,000 to 2.53 million in the week ended Aug. 16.
Initial jobless claims reflect weekly firings and typically decrease before job growth can accelerate. The timing and extent of closings to re-tool auto factories for the new model year can cause claims to swing during the summer, yet claims remained low by historical standards this year, even as job growth has accelerated.
U.S. employers added more than 200,000 workers to payrolls in July for a sixth straight month, the first streak of that length since 1997. Employment climbed by 209,000 after a 298,000 gain in June, while the jobless rate rose to 6.2 percent as more Americans began hunting for work.
The subdued pace of firing isn’t spurring policy makers to declare the job market healed. Central bankers from around the globe, including Federal Reserve Chair Janet Yellen, said labor markets still have further to heal before their economies can weather higher interest rates.
“The labor market has yet to fully recover,” Yellen said Aug. 22 in a speech at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming. The expansion has put more Americans back to work, yet “a key challenge is to assess just how far the economy now stands from attainment of its maximum employment goal.”